As last year went on, more and more analysts continued to see the writing on the wall that the Colombian economy was not going to bounce back toward recovery, and newly released government statistics have confirmed that the nation’s gross domestic product (GDP) only grew by 1.8% in 2017.
This was worst performance in eight years — below even the sluggish 1.96% growth of 2016 — and represents the third lowest rate this century, behind only the 1.65% seen at the trough of the global recession in 2009 and the 1.68% rate experienced in 2001.
While the overall figure from the National Administrative Department of Statistics (DANE) highlights the country’s current challenges, the agency’s year-end report did offer some good news. Five of the nine major economic sectors it measures did grow in 2017, and low commodity prices continue to be the biggest factor in the nation’s slow growth.
Agriculture led the way the way with 4.9% year-over-year growth, while financial services (3.8%), social/personal services (3.4%), hospitality (1.2%), and utilities (1.1%) also showed improvement. But counteracting this was the large 3.6% decline in natural resources as well as drops in industrial manufacturing (-1.0%), construction (-0.7%), and transportation/communications (-0.1%).
Financial services, according to DANE, was boosted by substantial growth in the financial intermediary sub-sector (6.7%) as well as real estate and housing rental services (2.8%). And despite the full-year fall for natural resources, the hydrocarbons sector did record positive year-over-year growth in both the third (1.7%) and fourth quarters (1.9%).
Looking ahead also offers more positive news: Leading analysts have all predicted a turnaround for the Colombian economy in 2018. While the Colombian central bank has been relatively pessimistic with a 2.7% GDP growth forecast, the International Monetary Fund (IMF) and World Bank have projected increases of 3.0% and 2.9%, respectively.
Bancolombia, the Andean nation’s largest bank, has predicted a figure below the consensus as well, with a 2.5% growth rate for 2018, but this would still represent a significant recovery.