NEWSLETTER #27 International Allies Bogotá, December, 2023 CONTENTS 1. Guest Columnist 2. Good news from Colombia and the Bogotá-Region 3. BCC News and Upcoming Events 4. Economic Overview 4.1. 4.2. 4.3. 4.4. 4.5.
Gross Domestic Product - GDP Economic Monitoring Indicator Inflation Business Dynamics Labor Market
5. International Trade 6. Foreign Direct Investment 7. Sources
1. GUEST COLUMNIST
Appreciation and Happy Holidays: A Message from the Bogotá Chamber of Commerce to Our International Allies Upon assuming the presidency in October this year, I faced the challenge and honor of leading an institution with 145 years of history working to strengthen Bogotá-Region’s business fabric. In these few months, we have achieved notable milestones that I would like to share with you so that you can firsthand understand part of our vision and collective effort. As a consulting and coordinating institution, our commitment to strengthening the business fabric has been closely aligned with the guidelines of the National Development Plan 20222026, working in conjunction with various organs of the National Government. This collaborative approach has been critical in driving initiatives that make a real impact on our community. Locally, we have led significant projects to boost the Popular Economy. Initiatives such as "Bogotá Smells of Bread," "San Victorino in Fashion," "Restrepo Open Skies," and our partnership with Bavaria and Fenalco, supporting more than 5,000 shopkeepers, reflect our commitment to backing small entrepreneurs, who are the heart of our economy. Internationally, we have reinforced and expanded our relationships. The third edition of “Bogotá Marcando Estilo”, in partnership with El Corte Inglés and the diplomatic mission to Madrid, have been key in promoting our culture, tourism, and gastronomy. Additionally, we have actively participated in the 50th General Assembly of the Ibero-American Association of Chambers of Commerce, approached various Embassies and members of the diplomatic corps accredited in Colombia to establish work plans that promote bilateral exchange with non-traditional trading partners in non-mining energy sectors and worked on the reactivation of binational trade with Venezuela, strengthening our regional economic ties. Additionally, during the last meeting of the General Council of the ICC World Chambers Federation (WCF), we reiterated our commitment to work for the benefit of the global network of chambers, which is why we were chosen to host the WCF Regional Summit for the Americas in 2024. From May 8 to 10, the Summit will bring together businesses, chamber leaders, and experts from the region and the world to discuss the latest trends in foreign trade and promote access to international markets for MSMEs, as well as host the face-to-face meetings of the Federation’s governing bodies. In addition to the above, we celebrate key agreements, such as the one signed with Bogota’s Mayor's Office, Corferias, Atenea, the National Learning Service (SENA), and the compensation funds to make a dream of all Bogotans a reality, the Bogotá Campus of Science, Technology, and Innovation. Also, we have promoted the entire creative and cultural potential of Bogotá-Region through spaces such as the
19th edition of ARTBO, our International Art Fair, and Gastrofest, our gastronomic festival with which we promote the authentic flavors of Bogotá and the Region. In conclusion, and despite the short time, we have carried out a significant number of initiatives aimed at strengthening the popular economy, supporting the base of the business social fabric, and contributing to the transition from an extractive economy to a productive and sustainable knowledge economy. And in this process, you, our international partners, have played a leading role. It is for this reason that, as we close this year of transformation and success, I want to express my deepest gratitude to each of you for your invaluable support and collaboration. The trust and commitment you have placed in the Chamber and in me in these first months of my management have been fundamental in achieving these significant achievements. Looking to the future, I am filled with hope and enthusiasm. The challenges we face are many, but the opportunities that arise are even greater. Together, we will continue to strengthen our business fabric, and open new paths for prosperity and growth. I wish you all happy holidays and a prosperous new year. May 2024 be a year of new achievements, fruitful collaborations, and continuous progress towards our shared goals. Ovidio Claro Polanco Executive President Bogotá Chamber of Commerce
2. GOOD NEWS FROM COLOMBIA AND THE BOGOTÁ REGION
COLOMBIA NEWS • COP 28: United Kingdom, Norway, and Germany to Provide Colombia with $34 Million for Amazon Rainforest Protection. With the aim of making the Amazon the first region in the country with zero deforestation by the year 2030, Colombia's Minister of Environment, Susana Muhamad, along with her counterparts, announced the injection of resources. For more information, consult the following link • Colombia to be the Official Host of COP16 Biodiversity Summit in 2024. Colombia, one of the most biodiverse countries on the planet, will host COP16, the world's most important Biodiversity Summit, bringing together leaders, experts, and decision-makers globally to exchange experiences and define joint goals for biodiversity protection. For more information, consult the following link. • The European Union and Colombia to Sign Agreement to Elevate Relations to a Strategic Alliance. This was announced by the parties at the end of the IX High-Level Political Dialogue, held in Bogotá with the presence of delegates from the 27 EU nations. It covers strategic issues in politics, environment, security and defense, human rights, and drugs. For more information, consult the following link. • Colombia closes Economic Partnership Agreement with the United Arab Emirates. This is the first agreement Colombia has with a country in the Middle East, a region where Colombian products have significant demand and opportunities in agriculture, technology services, and software, among others. For more information, consult the following link. BOGOTÁ-REGION NEWS • Bogotá and the Chinese pharmaceutical company, Sinovac, consolidate BogotáBIO, the country's first vaccine factory. With a district budget of 357 billion, BogotáBIO will benefit the entire population of the capital and the country. The city seeks to be better prepared and less vulnerable in case of new public health emergencies, epidemics, or pandemics, as well as to guarantee the right to health and life. For more information, consult the following link • The dream of the Bogotá Science, Technology, and Innovation Campus becomes a reality. On December 15, the Bogotá Mayor's Office, along with the Secretariat of Economic Development, the Bogotá Chamber of Commerce, and Corferias, signed a historic agreement to advance the construction of the Bogotá Science, Technology, and Innovation Campus (CTIB), set to open in 2027. This project, to be located in a 247-hectare area in the heart of the city, aims to connect the entrepreneurship and innovation ecosystem and is expected to benefit 36,000 people annually, creating 2,700 direct jobs each year until 2047. With an investment of 508 billion pesos, the CTIB is projected as an epicenter of innovation and development, reinforcing Bogotá as a leader in these fields in Latin America. For more information, consult the following link.
3. BCC NEWS AND UPCOMING EVENTS
•
The Bogotá Chamber of Commerce invites you to participate in a special webinar designed for visionary business leaders. In an ever-changing business world, the ability to strategically expand the team can make a difference. The webinar will thoroughly review 'The Advantages of Hiring Abroad and How to Do It Efficiently,' providing valuable information to enhance company growth. For more information, consult the following link.
•
The Bogotá Chamber of Commerce developed the event 'Path to Sustainability,' where we highlighted our Climate Action and Sustainability initiatives. During this session, held at the Salitre Headquarters of the Chamber of Commerce of Bogotá (CCB), significant advancements in the area of business sustainability were presented. The results of the Decarbonization and Climate Action Survey were discussed, featuring an innovative, free technological tool that allows companies to assess their maturity in sustainable practices. Additionally, the CCB Sustainability Ranking was highlighted, an online, free, and confidential platform that has been visited by 283 companies to date, and which forms part of the CCB's AVANZA initiative. For more information, consult the following link.
•
The Bogotá Chamber of Commerce, in cooperation with the Secretary of Economic Development and the Colombian-Venezuelan Chamber, organized the event: Current Status and Perspectives 2024 of the Colombian-Venezuelan Integration. A business matchmaking event was offered, generating more than 300 appointments, and specialized advice and commercial contact opportunities for Colombian and Venezuelan companies were provided. The goal was to develop a future-oriented culture, integrating knowledge and perspectives from different disciplines. Updated information on regulations, strategies, business matchmaking, specialized advice, and opportunities for networking with Venezuelan entrepreneurs was reviewed and shared.
•
The Regional Foresight Workshop of UNEP – Latin America and the Caribbean Region was successfully held on December 4 and 5 by the Bogotá Chamber of Commerce, the United Nations Environment Programme (UNEP), and CEPEI. We had the privilege of having brilliant and visionary minds from the region to discuss strategies and future trends. It was an invaluable event for sharing ideas and working together towards a sustainable and prosperous future. For more information, consult the following link.
4. ECONOMIC OVERVIEW
4.1. GROSS DOMESTIC PRODUCT - GDP In the third quarter of 2023, Bogotá's GDP decreased by 0.43% compared to the same period of the previous year, representing a setback of 9.3 percentage points compared with the third quarter of 2022, when the city grew by 8.9%. The economic activities with the highest participation in gross value added in the third quarter of 2023 were wholesale and retail trade, public administration and defense, and manufacturing industries, with a participation of 25.1%, 16.8%, and 12.8% respectively. Graph 1. Annual Growth Rate, by Quarter, of the GDP between 2019 and 2023 for Colombia and Bogotá 19,0% 18,2%
15,4%
13,8% 12,2% 11,1% 13,5% 8,9% 12,3% 11,1% 3,9%3,7%3,8% 3,1% 3,8% 3,6% 8,2% 7,4% 0,2%-0,4% 1,5% 1,1% 1,6% 2,4% 3,1%3,2%3,0%0,5% 3,0% 2,1% -3,5% 0,4%-0,3% -3,9% -7,8%
-9,2% -15,9% I
II
III
2019
IV
I
-16,9% II III 2020p
IV
I
II
III
IV
2021pr Colombia
I
II
III
2022pr
IV
I
II
III
2023pr
Bogotá
Source: DANE – SDDE.
Bogotá's Gross Domestic Product (GDP) reached COP 98.798 trillion in the third quarter of 2023, of which COP 86.196 trillion corresponds to the city's gross value added. The activities that contributed most to this gross value added were wholesale and retail trade, public administration and defense, and, in third place, real estate activities, with 25.1%, 16.8%, and 12.8% respectively. Likewise, the activities with the highest annual growth were public administration and health activities, mining activities, and agricultural activities, with growths of 4.8%, 10.6%, and 13.0%, respectively.
4.2 ECONOMIC MONITORING INDICATOR According to the Economic Monitoring Indicator (ISE) in 2022 and 2023, as of September 2023, monthly growth has fluctuated between -2% and 2%, as seen in Graph 2. The ISE recorded a monthly growth of 0.1%, remaining within the range of the last few months.
Graph 2. Monthly Growth of the Economic Monitoring Indicator 6,8 3,3
1,9 1,3 1,5 1,3 0,3 0,8 0,0 -1,6 -0,5 -0,9 -1,3 -1,7
2,4 -1,5
0,1
0,5 -0,9
0,8 -1,2
0,8 0,1
2021p
Abril Mayo Junio Julio Agosto Septiembre Octubre Noviembre Diciembre Enero Febrero Marzo Abril Mayo Junio Julio Agosto Septiembre
Febrero Marzo
Enero
Octubre
Agosto Septiembre
Junio Julio
-4,8
Mayo
Marzo Abril
1,5
-0,2
-0,6
-4,6
Enero
4,3 1,4
1,8
Noviembre Diciembre
1,6 0,1
Febrero
8,0 6,0 4,0 2,0 0,0 -2,0 -4,0 -6,0 -8,0
2022pr
2023pr
Source: DANE. ISE, 2023.
In September 2023, the activities that showed the highest monthly growth in the ISE were Wholesale and Retail Trade with 1.1%, Agriculture, Forestry, and Fishing with 0.8%, and Information and Communications with 0.7%. Regarding annual growth, the activities of Electricity, Gas, Steam and Air Conditioning Supply presented the highest growth in the ISE with 4.8%. Similarly, the activities with the most significant annual decline in the indicator have been the manufacturing industry and construction, with an annual variation of -5.0% for September 2023. Finally, Colombia's ISE experienced a slight advance in September 2023 compared to August 2023. 4.3 INFLATION Colombia and Bogotá experienced a decrease in the monthly price variation in November compared to the same month of the previous year. In November 2022, the monthly variation in Colombia was 0.77% and in Bogotá 0.75%, while in November 2023, it decreased to 0.47% and 0.29%, respectively. This decrease indicates lower inflationary pressure in the Colombian economy.
Table 1. Monthly and Annual Inflation in Colombia and Bogotá during November 2022-2023.
Period
Monthly variation in %
Year-to-datevariation in %
Annual variation in %
Colombia
Bogotá
Colombia
Bogotá
Colombia
Bogotá
oct-22
0,77
0,75
11,72
10,97
12,53
11,47
oct-23
0,47
0,29
8,78
8,90
10,15
10,27
Source: DANE-Consumer Price Index (CPI)
It is observed that the year-to-date variation in Bogotá has exceeded that of Colombia in the same period. As of November 2023, the year-to-date variation in Bogotá was 8.90%, while in Colombia it was 8.78%. This indicates that the capital has experienced higher inflationary behavior than the national average during that period. Meanwhile, Colombia's annual price variation decreased from 12.53% in November 2022 to 10.15% in November 2023, while the annual price variation in the capital in November 2023 shows a reduction of 1.2 percentage points compared to the same month in 2022, moving from 11.47% to 10.27%. The price variation data by expenditure division in Colombia and Bogotá for November 2023 show that the health expenditure division presented a variation of 0.61%. The division of expenditure in restaurants and hotels rose by 0.60% in Bogotá, while the division of Accommodation and public services increased by 0.56% in Bogotá. Regarding the divisions that fell, the expenditure division that showed the greatest negative variation in the city was food and non-alcoholic beverages, with -0.33%, followed by information and communications and recreation and culture, which varied by -0.6%. In the expenditure divisions of Colombia, it was the division of accommodation and public services that showed the highest positive variation, of 1.05%. As for the declines, food and non-alcoholic beverages and information and communications showed variations of 0.45% and 0.01%, respectively. 4.4 BUSINESS DYNAMICS In November 2023, the data show a slight decrease in the number of active businesses within the jurisdiction of the Bogotá Chamber of Commerce compared to previous years. There is a general decrease of 0.04% in the total number of active businesses for November 2023 compared to the same month in 2022. This represents a fall of 215 businesses over a year. When analyzing the distribution of businesses by legal category in November 2023, it can be seen that over 50% of the registered businesses belong to Natural Persons, with a total of 277,918 businesses, which represents 56.7% of the total active businesses in the jurisdiction of the Bogotá Chamber of Commerce. On the other hand, businesses under Legal Persons total 212,187, which represents 43.3% of the total active businesses in the same jurisdiction.
Regarding the annual variation, it is notable that the Legal Persons category experienced a positive growth of 1.3% in the number of active businesses between November 2022 and November 2023, while the variation for Natural Persons was -1.0%. Table 2. Evolution of Active Businesses from 2021 to 2023 for the January-November Period by Size Number of Active Companies % Variation participation 2022 November 2023 2023
Size
nov-21
nov-22
nov-23
Variation 2021 2023
Micro
429.529
458.902
454.488
5,8%
-1,0%
92,7%
Small
22.587
22.263
24.886
10,2%
11,8%
5,1%
Medium
6.232
6.210
7.308
17,3%
17,7%
1,5%
Large
2.965
2.945
3.423
15,4%
16,2%
0,7%
Total, BogotáCundinamarca jurisdiction
461.313
490.320
490.105
6,2%
-0,04%
100,0%
Source: Business Registry, 2021-2022-2023
In terms of the annual variation in the number of active businesses compared to November 2022, microenterprises experienced a decrease of 1.0%, while small businesses saw an increase of 11.8%. Medium-sized businesses grew by 17.7%, and large businesses recorded an increase of 16.2%. 4.5 LABOR MARKET Employment has shown improvement compared to the previous year. Nationally, the unemployment rate in October 2023 was 9.2%, 0.5 percentage points lower than in October 2022. Similarly, the employment rate has risen by 0.4 percentage points over the last year, standing at 58.1% for October 2023. The overall participation rate remained stable at 64.0% in October 2023, the same value as in October 2022. This is a good indicator of the improvement in the labor market, as unemployment in October 2023 continued to be lower than in the same month of the previous year."
Table 3. GPR, OR y UR, Colombia Oct-22
Oct-23
Difference (p.p)
Global Participation Rate
64,0
64,0
0,0
Occupancy Rate
57,7
58,1
0,4
Unemployment Rate
9,7
9,2
-0,5
Rates
Source: Large Integrated Household Survey – GEIH (DANE). September 2023
In the case of Bogotá and its metropolitan area, the unemployment rate was 9.3% for the rolling quarter of August-October 2023, 0.1 percentage points equal to the 9.3% national total for the same period. For the same quarter, the capital shows an employment rate of 63.6%, 5.3 percentage points above the national employment for the same quarter, which was 58.3%. The data show that more working-age people are participating in the labor market in the capital (70.2%) than in the country (64.2%). The number of employed people grew by 475.7 thousand from October 2022 to October 2023, and the number of non-employed people decreased by 3.6%, meaning 86.8 thousand fewer people in a nonemployment condition (previously called 'unemployed'). Perspectives on the number of employed are varied, as economic growth for 2023 is expected to be lower than that of 2022. 5. INTERNATIONAL TRADE
EXPORTS In October 2022, Colombia experienced a growth in its exports of 10.9% compared to the same month of the previous year, Bogotá showed a decrease of 6.6%, while Cundinamarca recorded an increase of 21.6%. A year later, in October 2023, Colombia experienced a decrease of 1.5% in its exports compared to October 2022, indicating a period of deceleration. Bogotá, on the other hand, achieved an increase of 8.9%, in contrast with Cundinamarca, which saw a decrease of 33.6%.
Graph 3. Annual Variation of Exports from Colombia, Bogotá, and Cundinamarca 2021-2023 120,0 100,0 80,0 60,0 40,0 20,0
8,9
0,0
-1,5
-20,0 -40,0
-33,6
-60,0
Colombia
Bogotá
Cundinamarca
Source: DANE, Exports. In October 2023, compared to the previous month, Colombia reported exports of $4,150.82 million FOB. Bogotá, for its part, maintained positive growth, reaching $311.92 million FOB for that month. Finally, Cundinamarca experienced a fall in its exports, totaling $162.59 million. In October 2023, the total exports of the Bogotá-Cundinamarca region reached a value of $474.51 million FOB. The United States stood out as the main destination for exports, with a total of $177.09 million FOB, which is equivalent to 33.17% of the overall total. Ecuador took second place in the list of export destinations with $60.21 million FOB, representing 11.28% of the total, while China was in third place with $36.58 thousand FOB, accounting for 6.85%. Peru and Mexico also stood out as relevant destinations, with $28.04 million (5.25%) and $25.38 million (4.75%), respectively. Japan contributed $19.08 million (3.57%), and Venezuela and Chile contributed $15.56 million (2.91%) and $14.95 million (2.80%), respectively, to the region's exports.
Graph 4. Exports by Destination Countries. Bogotá – Cundinamarca, September 2023 Ecuador; 11,3%
China; 6,9% Perú; 5,3% México; 4,8%
Estados Unidos; 33,2%
Japón; 3,6% Venezuela; 2,9% Chile; 2,8% Argentina; 2,8% Panamá; 1,9% Demás países ; 24,8%
Source: DANE, International Trade IMPORTS In September 2023, Colombia's total imports reached $4,944.2 million CIF, experiencing a decrease of 26.2% compared to September 2022. Similarly, Bogotá showed a decrease in its imports of 29.1% compared to the same month of the previous year, reaching $2,358.1 million CIF in September 2023. Bogotá's share of national imports also reduced, from 49.7% in September 2022 to 47.7% in September 2023. Cundinamarca, on the other hand, experienced a reduction in its imports, reaching $382.1 million CIF in September 2023, which is a variation of -38.4% compared to September 2022. Cundinamarca's share of national imports also reduced, from 9.3% to 7.7% in the same period. The Bogotá-Cundinamarca region, which includes Bogotá and Cundinamarca, recorded imports of a value of $2,740.26 million CIF in September 2023, representing a decrease of 30.6% compared to the same month of the previous year. The participation of this region in national imports decreased from 58.9% in September 2022 to 55.4% in September 2023.
Graph 5. Imports of Colombia, Bogotá, and Cundinamarca (September 2022-2023)
Millones de dólares CIF
6.695,8 4.944,2 3.325,4 2.358,1 620,8 Colombia
Bogotá Septiembre 2022 Septiembre 2023
382,1
Cundinamarca
Fuente: DANE, Imports. The main trading partners of the country were the United States and China. The United States led with $719.84 million CIF, representing 26.27% of the total, closely followed by China, which contributed $627.12 million CIF, representing 22.89% of the total. These two countries represent nearly half of all imports of the region (49.16%). Mexico, with $183.27 million CIF, occupied the third place in importance, contributing 6.69% of the total. Germany and Brazil also played a significant role, contributing $136.58 million (4.98%) and $108.58 million (3.96%) respectively. Argentina and Japan reached $69.57 and $64.98 million CIF, respectively, while the United Kingdom, Italy, and India presented contributions of $64.22, $56.94, and $54.31 million CIF. Finally, 'Other countries' contributed $654.84 million CIF, which represents 23.90% of the total imports of the region, highlighting the diversity of import origins beyond the main partners mentioned.
6. FOREIGN DIRECT INVESTMENT
During the third quarter of 2023, the country received $3.368 billion in Foreign Direct Investment (FDI), equivalent to 3.4% of the quarterly GDP. These funds were $255 million higher compared to the same period in 2022, and $1.862 billion lower than the immediately preceding quarter. Graph 6. Quarterly FDI Flows
Source: Central Bank Regarding FDI flows by country of origin, during the third quarter of 2023, the resources mainly came from the United States (US$ 1.129 billion), Spain (US$ 555 million), England (US$ 335 million), Panama (US$ 201 million), Mexico (US$ 156 million), Canada (US$ 156 million), Anguilla (US$ 152 million), and France (US$ 103 million, Graph 3). The annual increase in FDI (US$ 255 million) is primarily due to higher investments received from the United States, Mexico, Cayman Islands, England, and Canada, partially offset by lower investments from Switzerland, Panama, the Netherlands, and Spain.
7. SOURCES
• For more information, refer to the Observatory of the Bogotá Chamber of Commerce. https://www.ccb.org.co/observatorio • DANE. National Accounts. Retrieved from: https://www.dane.gov.co/index.php/estadisticas-portema/cuentas-nacionales/cuentas-nacionales-trimestrales • DANE. Labor Market. Information retrieved from: https://www.dane.gov.co/index.php/estadisticas-portema/mercado-laboral/empleo-y-desempleo • Commercial Registry, CCB, 2019 - 2020 - 2021 - 2022 - 2023. Retrieved from: https://www.ccb.org.co/Inscripciones-y-renovaciones/Matricula-Mercantil/Boletines-del-RegistroMercantil/Boletines-ano-2021 • DANE. Social Pulse Survey. Retrieved from: https://www.dane.gov.co/index.php/estadisticas-portema/encuesta-pulso-social • DANE, International Trade. Retrieved from: https://www.dane.gov.co/index.php/estadisticas-portema/comercio-internacional • Bank of the https://www.banrep.gov.co/sites/default/files/nota_de_prensa_inversion_directa.pdf"
Republic.