20130726-巴黎银行证券-Colombia_A_Primer_16页_743kb

Summary of Colombia's Market Economics

Core Content

Colombia is a constitutional republic with a complex political and economic landscape. The country has a history of political stability and has never defaulted on its debt. It has experienced significant improvements in security, especially since the early 2000s, due to policies like the Democratic Security initiative under former President Alvaro Uribe and ongoing peace negotiations with the FARC.

Economic Overview

• Economic Size: Colombia is the 25th-largest country in the world by area and the 31st-largest global economy by national income, with a nominal GDP of USD 350bn in 2012.
• Economic Structure:
  • Service Sector: Accounts for 56% of GDP and employs 61% of the workforce.
  • Industrial Sector: Contributes 38% of GDP, with manufacturing, mining, construction, and utilities as key components.
  • Agricultural Sector: Makes up 7% of GDP and employs 18% of the workforce.
• Growth: The economy has grown at an average rate of 4.5% per year over the last decade. Expected GDP growth for 2013 and 2014 is 4.4% and 5.1%, respectively.
• Inflation and Monetary Policy: The Central Bank of Colombia (BanRep) targets an inflation rate of 3.0% ± 1.0%. Since 1999, it has followed an inflation-targeting regime, and headline CPI inflation has remained within the target range.
• Fiscal Policy and Public Debt:
  • The fiscal deficit has narrowed to 2.0% of GDP in 2012 from 4.1% in 2009, driven largely by oil-related revenues.
  • The government has adopted a fiscal rule to limit the structural fiscal deficit to 1% of GDP by 2022.
  • Public debt as of April 2013 is 33.6% of GDP, with 72% held domestically and 28% externally.
  • The composition of public debt has improved, with a higher proportion of COP-denominated debt and longer maturities, reducing FX, interest-rate, and rollover risks.

External Trade and Balance of Payments

• Open Economy: Colombia has become more open, entering into free trade agreements with the US, Canada, Brazil, Mexico, and Chile, with an EU agreement set to take effect in August 2013.
• Trade Balance:
  • Exports account for 18% of GDP, with the US being the largest export market (36% of total exports).
  • Exports are dominated by the oil and mining sectors, contributing 53% and 13% respectively.
  • Imports account for 37% of GDP, with the US and China being the top two sources.
  • The trade surplus tripled to USD 5.1bn in 2012, driven by rising commodity prices.
• Current Account Deficit: The current-account deficit widened to USD 11.4bn in 2012 (3.2% of GDP) due to a larger deficit in the services, income, and transfer segments. It is expected to continue widening.
• Foreign Investment:
  • FDI increased almost ten-fold since 2003, reaching USD 16bn in 2012.
  • FDI is expected to stabilize at USD 13bn in 2013 and 2014, primarily due to reduced global demand for commodities.
  • Foreign portfolio investment (FPI) has been rising, with foreign holdings of local debt reaching 1.1% of GDP as of April 2013.

Currency and FX Market

• Exchange Rate Regime: Colombia adopted a free-float exchange rate in 1999 and follows a flexible regime with intervention rules to manage reserves, short-term volatility, and currency appreciation/depreciation.
• FX Market: The central bank uses automatic put/call auctions and discretionary interventions to maintain stability. It has a daily USD purchase program.

Oil and Mining Sector

• Oil Production: Colombia's oil output increased by 69% between 2004 and 2011, reaching over 1.0 million barrels per day in January 2013.
• FDI in Oil and Mining: The oil and mining sector accounted for 81% of total FDI in 2012, up from 67% in 2007 and 50% in 2000.
• Concerns of Dutch Disease: The surge in oil production has led to currency appreciation, potentially harming other industries.
• Oil Reserves: Colombia's proven oil reserves account for 0.1% of global reserves and 0.6% of Latin America's total. At current output levels, these reserves are expected to last for about seven more years.

Financial System

• Financial System Overview:
  • The financial system is strong and well capitalized, with total assets of COP 906.3trn (USD 477bn) as of Q1 2013.
  • Assets are expected to reach 138% of GDP in 2013, up from 89% in 2005.
• Banking Sector:
  • There are 23 banks in Colombia, 10 of which are foreign-owned.
  • The top five banks account for two-thirds of the banking system, with Bancolombia being the largest.
  • Banks account for 38% of the financial system and have COP 385trn (USD 203bn) in assets.
• Regulation and Supervision:
  • The Superintendencia Financiera de Colombia (SFC) oversees the financial system and is legally autonomous.
• Pension Funds:
  • Pension fund assets totaled COP 152.5tm (USD 81bn) as of March 2013, representing 16% of total financial system assets.
  • The majority of pension funds are mandatory, with the 'moderate' risk profile holding the largest share (74.2% of total pension assets).
  • Proteccion and Porvenir are the largest pension funds, holding 48tn and 37tn COP respectively, and together accounting for 65% of total mandatory pensions.

Key Charts and Tables

• Chart 1: Colombia in context (UN data)
• Chart 2: Distribution of household income, share of deciles (SEDLAC, CEDLAS, World Bank, BNP Paribas)
• Chart 3: Gini coefficient for selected countries (OECD, World Bank, BNP Paribas)
• Chart 4: Composition of Congress (Official websites, BNP Paribas)
• Chart 5: Armed-conflict statistics (DANE, BNP Paribas)
• Chart 6: GDP growth vs. domestic demand growth (DANE, BNP Paribas)
• Chart 7: GDP breakdown (DANE, BNP Paribas)
• Chart 8: Colombian investment and savings (% GDP) (IMF, BNP Paribas)
• Chart 9: Trade balance and terms of trade (BanRep, DANE, BNP Paribas)
• Chart 10: Current-account components (USD mn) (BanRep, DANE, BNP Paribas)
• Chart 11: FDI by sector (BanRep, BNP Paribas)
• Chart 12: FDI and portfolio investment (cumulative four-quarter, USD bn) (Reuters EcoWin Pro, BNP Paribas)
• Chart 13: Foreign holdings of Colombian local debt (% of GDP) (Reuters EcoWin Pro, BNP Paribas)
• Chart 14: Inflation measures and BanRep target (BanRep, BNP Paribas)
• Chart 15: Public and central government deficit (% GDP) (BanRep, BNP Paribas)
• Chart 16: Central government fiscal balance (BNP Paribas)
• Chart 17: Composition of government debt (Reuters EcoWin Pro, BNP Paribas)
• Chart 18: Oil production and change (kbpd, %) (Reuters EcoWin Pro, BNP Paribas)
• Chart 19: FDI - total and oil/mining sector (BanRep, BNP Paribas)
• Chart 20: Oil reserves and production (Ecopetrol, BNP Paribas)
• Chart 21: Oil production and export outlook (Ecopetrol, DANE, BNP Paribas)
• Chart 22: Financial-system assets as a percentage of GDP (Reuters EcoWin Pro, Superfinanciera)
• Chart 23: Public debt breakdown, as of April 2013 (Reuters EcoWin Pro, Ministry of Finance)

Key Tables

• Table 1: Colombia's foreign-currency long-term ratings (Bloomberg)
• Table 2: Oil-revenue windfall to regions and the government (COP trn) (ACP, ANH, MinHacienda, BNP Paribas)
• Table 3: Colombia's financial system by assets (COP trn) (Superfinanciera)
• Table 4: Key statistics for Colombia's three largest banks (Superfinanciera, Bloomberg, Standard & Poor's)
• Table 5: Key pension-fund statistics (COP trn), as of March 2013 (Superfinanciera, BNP Paribas)
• Table 6: Pension-fund assets and profiles, as of March 2013 (Superfinanciera, BNP Paribas)