Colombia is a tough call in terms of impact. Many of its exports to the US are inelastic in terms of demand, but it is a good moment to look around for new markets. According to the press, Colombia is in the 10% bracket, and US negotiators will arrive in May to thrash out the details. The political skirmish with the US from last weekend already appears to have blown over, which suggests there may have been a lot of exaggeration involved.

Forex traders are suffering, as are those with international trade. The Peso jumped above $4400, then fell back – where it will be next work is a guesstimate at best. There was good news from Departamento Administrativo Nacional de Estadística – DANE Colombia on the inflation front for March with a 0.52% reading, which translated into 5.09% on a 12m basis. Consensus expectation from Fedesarrollo was 5.17%. This surely now gives Banco de la República – Colombia the space to lower rates in a couple of weeks.

One area where Colombia is caught in a trap is on gas. Local production has struggled, and whilst recent offshore discoveries will help the situation moving forward, there is work to do. The 2024 gas reserves data was published and has dropped to just 6 years, and there is a shortfall to be covered. Initially, the plan was to look for cheap imports from Venezuela; however, Trump’s hostility towards Caracas and the threat of sanctions for those trading with Nicolás Maduro have complicated the situation. To contextualize the situation in 2012, reserves were above 13 years; however, those at the ANH are hoping that we have now reached the bottom, and that increases due to discoveries will change the trend.

Moody’s was again discussing the fiscal rule, and despite some easing, feels that it won’t be achieved in 2025 due to a shortfall in government revenues. Again, we come back to the global chaos, which has seen oil prices collapse to $60. Gas-guzzling Americans will be ecstatic as the driving season approaches, but it is no help to Colombia.

Have a great day.

Roops.

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Natural gas well. Photo credit: Ken Doerr.

Today, good news only. Let’s chat about Colombia’s continued home run, tourism. Whilst Gustavo Petro was only picking up the baton of the upward curve that had existed since COVID-19 finished, he strongly declared that tourism would eventually replace commodities in terms of dollar revenues and was the fastest form to lift needy communities out of poverty.

Last year saw (tourism) dollar revenues hit $10 billion USD, not quite at commodity level, but closing very fast, and Colombia is only just beginning to realize it’s enormous potential as a desirable destination. The United Nations has also supported globally the concept of decreasing poverty via tourism, and there is a huge drive to push that campaign forward.

This week, ANATO Vitrina Turistica, the largest tourism fair in the region, took place in Bogotá. A total of 5,000 companies were represented across 46 countries with 50,000 attendees. I was there, and the pavilions were hopping; at times, it was like New Year’s in Times Square. Equally, at FITUR in Madrid a month ago, Colombia was in play.

2024 was a record year, and already, 2025 is set to surpass those numbers. In January, international airline arrivals increased by 13% to 2,254,000. Attendees at ANATO also reported a healthy start to the year.

But it will not be Medellín or Cartagena that will be the forward-looking driver. Instead, it will smaller towns and villages as visitors locally join the international tendency to seek more adventurous destinations. Some future hotspots haven’t been heard of by most Colombians, let alone by those arriving from overseas.

When will it match oil & coal? Judging by the vibes in the pavilions, it will possibly be sooner than expected, but in an ideal world, both will continue in rude health.

In other news. From Fedesarrollo, there was an improvement in both industrial and retail confidence, this dovetails with the recent consumer reading.

The government also announced that it had carved out 69 sectors, spread across 270 square kilometers, for future offshore eolic energy auctions—that’s wind power to us mere mortals.

Always good to end on the positives.

Have a great Friday.

Regards Roops.

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Photo credit: wjgomes from Pixabay.