Colombia: Private Sector Outlook

National Business Association of Colombia

January 2015

ANDI- National Business Association

More than 1200 members which represent 35-40% of Colombia’s GDP

28 specialized sector chambers

Purpose: Represent, provide services and procure for a stable business environment

11 regional branches

International Strategic Allies

Our international network of allies extends through the all continents

Colombia:

Proven strong fundamentals

2000 2013 2014GDP

GDP(US$ Millions) 94,075 378,125 377,185Economic Growth rate 2.9 4.2 4.8GDP per cápita (US$) 2,385 8,025 7,920

Foreign TradeExports (US$ Millions) 13,158 58,822 56,057 Industrial (US$ Millions) 7,034 21,724 19,544Imports (US$ Millions) 11,539 59,397 63,674International Reserves 9,004 43,600 47,323Months of imports 9.4 8.8 8.9

InvestmentInvestment (% GDP) 14.5 27.9 30.1Foreign Direct Investment (US$ Millions) 2,436 16,199 15,500FDI (% GDP) 2.6 4.3 4.1

Debt (% GDP)Foreign Debt (% GDP) 36.3 24.4 24.6Fiscal Debt (% GDP) 31.6 24.4 24.6

Macroeconomic EnvironmentInflation 8.8 1.9 3.6Deposit interest rate (yearly average) 12.1 4.1 4.3

Labour MarketUnemployment rate (yearly average) 16.7 9.7 9.1

Social IndicatorsAffiliates to health services (thousands) 22,756 43,207Poverty rate 55.0 30.6 29.3

COLOMBIA: MAIN INDICATORS

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2010 2011 2012 2013 Jan-Sep/14Agriculture 0.2 2.1 2.5 5.5 3.6Mining 10.6 14.5 5.6 4.9 0.8

Coal 1.9 14.7 3.9 -4.0 11.6Oil and gas 16.8 17.8 4.6 7.8 -1.7

Manufacturing 1.8 4.7 -1.1 -1.0 0.5Utilities 3.9 3.0 2.1 4.9 4.1Construction -0.1 8.2 6.0 12.0 13.7

Housing -0.3 4.1 5.9 11.4 7.7Infraestructure 0.1 12.9 6.0 12.7 18.4

Retail trade, restaurants & hotels 5.2 6.7 4.3 4.3 5.1Transport, communication & warehousing 6.2 6.6 4.9 3.1 4.4Finance, insurance and real estate 3.6 6.7 5.0 5.0 5.5Government, social and personal services 3.6 3.1 5.0 5.3 5.7

Government 4.3 2.1 4.8 5.9 6.9

GDP 4.0 6.6 4.0 4.7 5.0

COLOMBIA: GDP GROWTH RATE

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2010 2011 2012 2013 Jan-Sep/14TOTAL GDP 4.0 6.6 4.0 4.7 5.0Imports 10.8 21.5 8.9 4.5 12.6Consumption 5.1 5.5 4.7 4.4 5.3 Households 5.0 6.0 4.4 4.2 5.1

Domestic consumption 4.7 5.9 4.3 4.3 5.1Non durables 3.2 3.4 3.6 4.1 5.2Semi-durable 9.0 14.0 5.1 5.9 4.7Services 4.0 5.4 4.5 4.2 4.5Durables 21.6 21.2 7.6 3.8 8.1

Government 5.6 3.6 5.7 5.8 6.7Investment 4.9 19.0 4.6 6.1 13.0Domestic demand 5.6 8.4 4.6 4.7 7.8Exports 1.3 11.8 6.1 5.4 -0.8

ECONOMIC GROWTH ACCORDING TO EXPENDITURE

Colombia in relation to Latin America

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GDP Population GDP per capita Intl Reserves FDI InvestmentUS$ Millions Millions US$ US$ Millions US$ Millions % GDP

BRAZIL 2,190,218 199.9 10,958 362,410 61,924 19.2MEXICO 1,327,021 118.2 11,224 176,152 24,600 24.2COLOMBIA 378,125 47.1 8,025 43,600 15,000 23.7ARGENTINA (Official rate) 484,596 41.5 11,679 30,799 9,029 24.2

ARGENTINA (Market rate average) 272,041 41.5 6,556VENEZUELA (Official rate) 367,482 30.0 12,256 21,729 3,152 24.0

VENEZUELA (Market rate average) 34,783 30.0 1,160CHILE 281,666 17.6 16,043 39,903 9,501 25.7PERU 210,349 30.9 6,797 66,279 11,979 27.9ECUADOR 91,412 14.9 6,154 4,051 486 28.2URUGUAY 57,107 3.4 16,836 16,121 3,160 19.7BOLIVIA 29,805 11.0 2,700 14,311 1,287 19.3PARAGUAY 30,558 6.8 4,499 5,832 - 16.6

Sources: Central Banks in each country, IMF, Calculations ANDI

Latin America: Economic Indicators 2013

Industry: Weak recovery

Actively pursuing a global integrated economy

Integration

FTA

Partial Scope Agreements

BIT or double taxation treaties

COLOMBIA: FREE TRADE & ECONOMIC PARTNERSHIP AGREEMENTS

Integration

FTA

Partial Agreements

Investment and double taxation

Potential FTA 20

Population GDP Exports ImportsMillions US$ Millions US$ Millions US$ Millions

Current FTA 1,409 38,600,427 12,392,877 12,294,802Mexico 118 1,327,021 400,106 413,064Triángulo Norte (El Salvador, Guatemala, Honduras) 30 97,447 28,546 43,364CAN (Peru, Ecuador, Bolivia) 57 331,566 87,792 90,776CARICOM (Caribbean Community) 17 17,394 37,435 42,686MERCOSUR 252 293,094 514,418 530,550Chile 18 281,666 92,266 93,002EFTA 13 13,487 524,553 406,520Canada 35 1,825,062 544,065 564,662United States 317 16,724,272 2,276,264 2,744,520Venezuela 30 367,482 91,826 74,594Nicaragua 6 11,284 5,307 7,700European Union 505 17,236,563 7,771,775 7,268,255

Subscribed FTA 233 3,747,627 1,363,238 1,312,014Korea 50 1,197,506 683,911 617,203Costa Rica 5 48,505 17,220 19,308Israel 8 272,737 94,863 91,410Panama 4 40,618 27,504 28,178Pacific Alliance 167 2,188,261 539,740 555,916

FTA under negotiation 127 5,007,203 832,736 957,794Turkey 76 821,798 208,077 267,366Japan 127 5,007,203 832,736 957,794

TOTAL 1,769 47,355,257 14,588,851 14,564,610World 7,162 73,454,493 23,189,386 23,189,386Share 24.7 64.5 62.9 62.8

Source: DANE, MCIT, IMF, WTO, UNCTAD

COLOMBIA: FREE TRADE AGREEMENTS

Country/Zone2013 2013

2012 2013 Jan-Nov/14

Total Exports 57,420 60,667 51,061 43.0 5.7 -4.7 Traditional 40,253 42,238 36,467 56.9 4.9 -3.6 Coffee 2,608 1,910 2,234 38.5 -26.8 31.6 Petroleum 28,421 31,642 27,424 69.6 11.3 -7.4 Coal 8,397 7,805 6,225 39.6 -7.0 5.2 Ferronickel 827 881 584 -14.5 6.6 -7.0 Industrial 23,278 23,652 8,555 26.2 1.6 -6.3

Total Imports 54,675 58,632 49,413 34.4 7.2 7.6 Consumption Goods 11,315 12,705 10,816 25.7 12.3 8.4 Raw Materials 22,609 25,121 21,750 32.0 11.1 9.4 Capital Goods 20,723 20,780 16,829 42.7 0.3 4.9 For Manufacturing 10,495 11,555 9,891 26.0 10.1 6.0 Industrial Machinery 4,380 4,783 3,820 29.7 9.2 -5.4

COLOMBIA: FOREIGN TRADE (Millions US$)

2012 2013 Jan-Nov/14Growth rate (%)

Jan-Oct/142012 2013 Jan-Oct/14 2012 2013

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2013 Jan-Nov/1458,822 51,061 -4.7 100

Countries with lower exports from Colombia

United States 18,459 12,963 -24.8 25.4Chile 1,572 919 -37.3 1.8Venezuela 2,256 1,861 -12.3 3.6Argentina 433 188 -53.7 0.4Aruba 1,716 1,120 -15.4 2.2Germany 780 577 -22.4 1.1India 2,993 2,696 -5.2 5.3France 327 137 -50.8 0.3Ecuador 1,975 1,700 -5.8 3.3Peru 1,274 1,096 -6.9 2.1United Kingdom 1,116 1,014 -2.7 2.0

35,340 26,455 -20.7

Countries with greater exports from Colombia

China 5,102 5,543 23.4 10.9Panama 3,329 3,417 23.0 6.7Spain 2,879 3,094 20.7 6.1Turkey 624 725 29.4 1.4Mexico 864 850 10.2 1.7Other Countries 4,163 2,994 2.3 5.9Brasil 1,591 1,487 1.7 2.9Netherlands 2,273 1,998 0.5 3.9

23,481 24,605 21.9

COLOMBIA: EXPORTS ACCORDING TO COUNTRY Growth rate Share

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Exports FOB Imports FOB Trade Balance2014 2014 2013 2014

ALADI 10,663 10,354 39 309Ecuador 1,542 732 940 810Peru 1,018 921 419 97Argentina 162 826 -1,092 -664Brazil 1,383 2,010 -722 -627Chile 868 738 674 130Mexico 796 4,145 -3,764 -3,348Panama 3,049 44 2,408 3,004Venezuela 1,668 368 1,561 1,300

United States 11,994 14,584 3,112 -2,590

European Union 8,211 6,971 1,417 1,240Germany 529 1,981 -1,072 -1,452Spain 2,915 751 1,608 2,165France 103 1,518 -802 -1,415Italy 830 788 -390 42Netherland 1,919 234 1,594 1,685United Kingdom 957 489 548 468

Japan 348 1,209 -832 -860China 5,406 9,119 -4,330 -3,713India 2,374 1,090 1,471 1,284Korea 96 1,146 -896 -1,050

Other Countries 6,173 3,824 2,198 2,349

Total 47,158 50,754 1,507 -3,596

COLOMBIA: TRADE BALANCEJanuary-October (Millions US$)

Improvement in social issues

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Successful security policy

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Favourable macroeconomic environment

Colombia: Challenges and opportunities

Challenges of the near future• Competitive economic growth

• Maximize opportunities• Colombia´s growing role in the international context

• Reliable country:• FDI• Financial resources• Foreign trade• Technology

• Competitiviness Agenda• Infrastructure• New markets• Capital markets• Science and Technology• Human Capital• Formalization 33

Overall economic growth

Opportunities in all economic activities

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Challenges of the near future• Competitive economic growth

• Maximizing present opportunities• Colombia´s growing role in the international context

• Reliable country:• FDI• Financial resources• Foreign trade• Technology

• Competitiviness Agenda• Infrastructure• New markets• Capital markets• Science and Technology• Human Capital• Formalization 38

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Challenges of the near future• Competitive economic growth

• Maximizing present opportunities• Colombia´s growing role in the international context

• Reliable country:• FDI• Financial resources• Foreign trade• Technology

• Competitiviness Agenda• Infrastructure• New markets• Capital markets• Innovation, Science and Technology• Education - Human Capital• Formalization 42

Economic Relations between

Colombia and France

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The Colombian private sector looks forward to a greater involvement with

France and French partners

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