Colombia: Back in the limelight
After a few tough years, the country is on investors’ radar screens again.
The resurrection of Colombia in the eyes of the international capital markets seems to be well under way. The country, which hung on to its investment-grade credit rating until 2002, continues to suffer from internal instability and a steadily rising debt burden.
But interest in Colombia is reviving as president Álvaro Uribe’s first term in office comes to an end and GDP growth looks set to hit 4% this year. The stockmarket has doubled in value in the past 12 months – the best performance in Latin America – and the government has been very successful at borrowing internationally in local currency.
And Colombia is now a hot destination for companies looking to expand into Latin America. Last month, French retailer Carrefour announced that it would invest $100 million there next year. The company will build at least five new hypermarkets as well as modernize its supply chain. In July, global beer firm SABMiller announced a $7.8 billion deal to buy Colombia’s largest brewer, Bavaria.
Even the rise of terrorist groups from 1998 onwards had an unexpected silver lining in the form of a strong and stable currency. Historically, remittances to Colombia from abroad (mainly the US) have averaged about 1% of GDP a year.