Though many other nations in Latin America are starting reverse a trend of falling exports, Colombia has yet to rebound, according to the Inter-American Development Bank (IDB). The rate of decline has slowed slightly in the country since the price of oil tanked in the fall of 2014, but it still lags behind its regional peers.
By contrast, a new IDB report into trade flows shows that Brazil, Mexico, Argentina, and Peru all began to record year-over-year increases in their volume of exports beginning late last year. Since Argentina has been the only nation to see an actual increase in dollar terms as opposed to export quantity, these gains have not been enough to turn around the export decline for the entire region.
But the rate of decline has slowed throughout Latin America and the Caribbean much more than in Colombia. While export value contracted by 15 percent throughout in the first quarter of 2015, the first three months of 2016 show only a 9 percent drop. This isn’t cause for widespread celebration, but it does represent positive news.
“After 18 months of trade contraction exports from the region have fallen with less intensity,” said Paolo Giordano, principal economist of the IDB.
Due to its reliance on oil exports, Colombia continues to show one of the largest export contractions in all of Latin America. Export value dropped by 32% in the first quarter of 2016 vs. 35% in the first quarter of 2015. Venezuela, Ecuador, and Bolivia, which are similarly reliant on oil and gas exports, also are struggling to get back to the level they were at before the crash in fossil fuel prices.
The effect has been a region-wide drop in export value that has lasted longer, but with less intensity, than following the 2008 financial crisis. That crisis kicked off a 24 percent reduction over 13 months while the commodity price collapse has triggered a 13 percent fall that has now lasted 18 months.
The good news is that, according to IADB, commodity prices “may have bottomed out in early 2016 and are showing signs of recovery.” If the oil rally continues, Colombia could recover quicker than many expected.
Colombia showed near-constant export growth throughout the commodity boom that started in the early 2000s, reaching a record-high $68.0 billion USD in exports in 2012. That number has decreased in each of the last three years, however.