Macroeconomic Forecast Colombia

BMI View: In light of the current regional tension, we are revising our forecast for Colombia's current account in 2008. With the country's current account position heavily dependent on trade with neighbouring Venezuela, we envisage a not insignificant slowdown in exports in addition to the import quotas announced by President Hugo Chávez. As such, while we were initially forecasting last year Colombia's current account deficit to remain at a manageable 1.9% of GDP, we now see it growing to around 3.6%. The slowdown in the US is also a factor, as the destination of 34.6% of Colombia's exports in 2007, although the country is more insulated than ever before due to successful diversification of export markets.

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