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LatAm Colombia Investment

Colombia is considered to be a stable developing country, showing a CAGR of 4.1% over the past four years and with a forecast growth of 4% for this year. Nevertheless, some of its production sectors have been affected by factors such as decreased oil and coal activities and by the global crisis, which caused a fall in export volume and value of these commodities. With unemployment rates dropping since 2009, the country has been of great interest to investors, as seen in a recorded rise in foreign net investment since 2010.

There are a number of reasons for this appeal to foreign investors. The strengthening of national companies (Nutresa, Ecopetrol among others) is one of them, and this has also helped trigger the country’s entry to the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa – countries that have been identified as rising economic forces). This empowerment prompted the possibility of investment diversification in other sections of the economy besides oil and mining, such as manufactured products, food, and retail. A second reason is the free trade agreements signed with the United States, Europe, South Korea and Costa Rica, and a third reason is the country’s investment program and the reorganization of its tax structure.

Added to these factors is the increase of consumer credit, encouraging the nation’s growth. A country once only recognized for its problems (such as conflicts and trafficking), is today attracting attention for its consumption, which is being boosted by the development of the middle class. Although a mild retraction of the industry is expected, sectors such as mining, construction, agriculture and commerce should show improvement. It is a significant change for a country that was until recently dependent mostly on commodities. In this scenario retail, banking and communication brands – like Claro (which replaced the Comcel brand), and SABMiller (Águila and Poker) – are growing in value.

Isa Telles

BrandAnalytics Associate