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Colombian Economy | Colombia Backpacking


Colombian Economy

Colombia is a middle-income economy with a growing middle-class. A close economic and political ally of the United States, it has recently signed numerous free trade agreements with the US and other nations. A free-market economy, its recent administrations have pursued growth through export-oriented strategies, and by enacting policies to facilitate massive foreign investment.

The two most important exports in Colombia are petroleum and coffee. Colombia is the world's third largest coffee exporter, behind only Brazil and Vietnam. Oil, which is mostly concentrated in the eastern plains, is typically located in politically unstable areas. Additionally, there are concerns about new investments in exploration to offset decreased production.

While Colombia has been relatively economically stable through the Uribe/Santos years, concerns about debt, government spending, and unemployment remain. Colombia has, however, never defaulted on its debt, making it unique among Latin American countries. Inflation has been relatively low as well, especially in comparison to some of its neighbors.

Colombia has a relatively high degree of inequality in distribution of wealth, although this is improving. The main challenge ahead for the Colombian economy lies in incorporating greater percentages of its population into the middle class, while maintaining sound fiscal discipline, and adequate social spending. Additionally, Colombia must seek to bring an end to its long-standing internal armed conflict.

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