The Colombian government is divided into three branches: the executive branch (headed by the president), the legislative branch (represented nationally by congress) and the judicial branch (headed by a supreme court). Compared to other South American economies, public spending in Colombia is right down the middle at about 17 percent (e.g. higher than Chile, Argentina and Mexico, but lower than Brazil).
Colombian healthcare expenditures represent 7.06 percent of the GDP. About 76 percent of the expenditures stem from public sources and the remaining 24 percent from private sources.
In spite of the forecasted acceleration in the global economy, for Colombia, the economic growth experienced a slight slow-down from 2014 to 2015.
Despite the recent slow-down, expectations for the economy are positive and a period of continued growth is expected until 2017.
Colombia’s economy has a heavy dependence on energy and mining exports, making it vulnerable to a drop in commodity prices. The main exports include coal, for which Colombia is the 4th largest exporter in the world, and oil for which they are the fourth largest producer in Latin America. Other exports include: Coffee, emeralds, bananas and apparel.
Colombia’s exports mainly go to the U.S. (37 percent), China (6 percent), Spain (5 percent), Venezuela (4 percent) and the Netherlands (3.9 percent).
As mentioned above, Colombia’s economic outlook is positive, but still sensitive to export activity, especially when it comes to oil. Some concerns in this area were raised in 2014 due to diminished production which was under the government target. This is especially concerning due to the fact that the government relies mostly on oil rents to sustain its fiscal agenda of expansion. If the decline in output were to become serious, it could increase the possibility of decelerated economic growth in the long term.
Total life expectancy at birth in Colombia is similar to Brazil at 74.4 years of age, but below the expectancy in Chile, Argentina and Mexico.
The latest data show that the Colombian economy is growing at a rate of 4.2 percent (nominal growth). This is below the growth rate in 2014 and 2013. Despite the current slow-down, a return to growth is expected in 2016-2017.
Unemployment is high but decreasing. In 2014, the jobless rate was at around 10 percent. For 2015, analysts expect this figure to decrease to about 9.5 percent, with a return to growth in 2016-17.
Consumer prices in Colombia rose more than expected in 2014, which was slightly above the bank’s target of 3 percent (i.e. 3.2 percent).
The inflation rate in 2014 was around 3 percent coming from 2.2 percent in 2013 and it is expected to remain stable at about 3.2 percent in 2015.
Colombia’s economic growth will experience a slight slow-down in 2015, but is expected to return to growth in 2016-17 bolstered by government reforms, an improved business environment and more efficient macroeconomic administration and investment growth.
Despite the positive forecast, a possible decline in global oil prices presents a risk to the Country’s economic development.
The economic outlook for Colombia will be impacted by two major factors:
- Oil Dependence: Oil accounted for about 66 percent of Colombia’s exports in 2013 and continues to be a dominant factor in in the economy today, making the country’s economic performance sensitive to market fluctuations.
- Trade partner economies: The U.S., China, the Euro Zone and Venezuela.
The government has a strong policy framework in place that includes: an inflation targeting regime, flexible exchange rate, an overhaul of the oil and mining royalties system, efficient financial regulation and monitoring and a structural fiscal balance rule.
Fiscal policies have also been put in place to decrease the government deficit over the medium term. Such measures will improve the country’s ability to sustain its economic targets over the next few years.
For further quantitative information on the Colombian healthcare system and the macroeconomic climate, please look into our Business Intelligence platform or order the TforG Deep Dive report for Colombia containing volumes of 620 surgical procedures in 10 specialisms.