NEWSLETTER # 30 INTERNATIONAL ALLIES
Bogotá, March, 2024 CONTENT
1. Guest Columnist
2. Good news from Colombia and Bogotá-Region
3. BCC News and Upcoming Events
4. Economic Developments
4.1. Gross Domestic Product - GDP
4.2. Economic Monitoring Indicator
4.3. Inflation
4.4. Labor Market
5. Evolution of Foreign Trade
6. Foreign Direct Investment
7. Sources
1. GUEST COLUMNIST:
Strengthening Economic Cooperation for Global Resilience
In a world marked by economic uncertainties and global challenges, the importance of economic cooperation among developing countries cannot be overstated. As the Chairman of the ICC World Chambers Federation, I emphasize the significance of collaboration not only among chambers but also among developing nations to unlock shared opportunities and promote sustainable development.
The world economy has showcased remarkable resilience despite recent adversities such as the war in Ukraine, conflicts in Gaza, inflationary pressures, and a historic rise in interest rates. The forecasts from the World Bank indicate a slowdown in global growth, underscoring the need for proactive measures to support businesses and economies worldwide. This calls for strengthened cooperation among chambers of commerce to navigate these challenges effectively.
Colombia stands as an exemplary model of resilience and potential in the face of global challenges. With its diverse economy spanning agriculture, mining, tourism, and more, Colombia offers significant opportunities for investment and development. The Bogota Chamber of Commerce, with its rich history and upcoming leadership in hosting the 1st WCF Regional Summit, exemplifies the proactive role chambers play in driving economic progress and fostering international partnerships.
The ICC World Chambers Federation (WCF) serves as a unifying force, playing a crucial role in uniting chambers globally and advocating for key priorities such as market access for SMEs, ecommerce advancement, sustainability promotion, and women's empowerment. As we prepare to launch the WCF Women Council in Bogota, we are taking concrete steps to empower women
entrepreneurs and leaders on a global scale, recognizing their immense contribution to economic growth and social development.
Turkiye's robust economy and strategic initiatives highlight its role as a key player in fostering economic cooperation, particularly with South American countries. Despite global economic challenges, Turkiye's exports reached 256 billion dollars last year, with 94 percent comprising industrial products, showcasing its industrial strength and global competitiveness. The growing economic ties between Turkiye and South American nations underscore the potential for expanded cooperation across various sectors, facilitated by chambers of commerce acting as catalysts for international business collaboration.
Trade volumes between Turkiye and key South American nations like Brazil, Argentina, and Chile have witnessed substantial growth, paving the way for enhanced economic ties and shared prosperity. Chambers of commerce play a crucial role in facilitating such partnerships, providing platforms for businesses to connect, collaborate, and explore new markets.
In conclusion, economic cooperation among chambers and developing countries is essential for driving sustainable growth and creating a more interconnected global economy. By fostering closer ties, sharing knowledge, and advocating for common interests, chambers of commerce can lead the way in building a brighter and more prosperous future for all stakeholders.
M.Rifat Hisarcıklıoglu
Chairman, ICC World Chamber Federation (WCF)
President, Union of Chambers and Commodity Exchanges of Turkiye (TOBB)
2.
GOOD NEWS FROM COLOMBIA AND BOGOTÁ-REGION
GOOD NEWS FROM COLOMBIA
The tourism sector continues breaking records. Foreign exchange earnings from tourism in Colombia grew by 22.4% in 2023, to over USD 9 billion. The arrival of non-resident visitors in 2023 exceeded 5.8 million, that is, a growth of 26.6% compared to 2022. Non-resident foreigners represented 64.3% of the total, with an increase of 26.2%. For more information, please visit the following link
Reactivation of the railway sector throughout the country. In the last 18 months, the National Infrastructure Agency has allocated $464,000 million pesos to five contracts to guarantee operation of railway corridors. The cost of cargo freight would decrease by 26% between Bogotá and the country's ports, positively affecting all national and international trade. For more information, please visit the following link.
GOOD NEWS FROM BOGOTÁ-REGIÓN
Bogotá will be the permanent venue for the Blockchain Summit Latam. The event, the leader in business and networking in the Blockchain ecosystem in Latin America and one of the oldest in the region, announced its eighth edition, from August 14 to 16, 2024 at the Ágora Convention Center. For more information, please visit the following link
Bogotá consolidated itself as the Colombian capital of entrepreneurship with StartCo and is working on the Science, Technology and Innovation Campus. For the second consecutive year, Bogotá will bring together nearly 17,500 attendees that include around 700 start-ups, 350 investors and the general public interested in the use of technology to strengthen business models at StartCo: the first live start-up auction and the largest in Latin America. For more information, please visit the following link
Foreign tourism in Bogotá is experiencing an increase of 8.8% in 2024. According to data from Migración Colombia, the Colombian capital received a total of 294,642 international visitors during January and February. This figure reflects the growing popularity of Bogotá as a top-level international tourist destination. The city, with its rich cultural, culinary, historical and natural offerings, continues to captivate visitors from all over the world. For more information, please visit the following link.
Women in Tech comes to Bogotá aiming at closing gender gaps in the labor market and greater inclusion of women in the technology sector, promoting women in the labor and
technology markets. The arrival in the country of the renowned NGO is now a reality, which seeks to empower 5 million women and girls with STEAM skills (Science, Technology, Engineering, Arts and Mathematics) by 2030. For more information, please visit the following link
3. BCC NEWS AND UPCOMING EVENTS
The Bogotá Chamber of Commerce is pleased to invite MSMEs, entrepreneurs and businesspersons, industry participants and leaders and chambers of commerce from around the world to join the ICC WCF Summit of the Americas: Business Without Borders: Global Access for MSMEs " on May 8 and 9, 2024 in Bogotá, Colombia. This meeting will bring together special guests and panelists, and more than 600 MSMEs from the Americas in a large business conference, along with more than 100 representatives of chambers of commerce from around the world. The Summit promises impactful discussions for business and trade worldwide. For more information, please visit the following link
STARTCO and the CTIB. The event highlighted the Colombian capital as an innovative city and its leadership in the consolidation of the Science, Technology and Innovation Campus (CTIB): 247 hectares as the epicenter of a smart, sustainable and more productive city, based on the development of its headquarters building, infrastructure, equipment and a portfolio of services for entrepreneurs, business persons and citizens interested in science, technology and innovation, with the support of the Bogotá Chamber of Commerce (BCC), Corferias and the Agency for Higher Education, Science and Technology (ATENEA). For more information, please visit the following link
The Bogotá Chamber of Commerce announced that it received the Friendly Biz certification for its leadership in inclusion and diversity, guaranteeing that its work environment is free of discrimination, and is the first chamber of commerce to receive it. For more information, please visit the following link
The eighth edition of the ArtBo Weekend will be held from April 12 to 14. The ArtBo arts program, sponsored by the Bogotá Chamber of Commerce, celebrates its 20th anniversary with the eighth edition of ArtBo Weekend. The event is free and is aimed at fostering new audiences, strengthen the cultural and creative industry, and contributing towards the cultural development of the city. For more information, please visit the following link.
4. ECONOMIC DEVELOPMENTS
4.1. GROSS DOMESTIC PRODUCT - GDP
In 2023, Colombia's GDP recorded growth of 0.6% compared to 2022. Although there was some growth, the figure is lower than expected by analysts who estimated that it would be above 1%.
Source: DANE.
In the fourth quarter of 2023, Colombia's GDP grew 0.26%, this is a decrease of 1.93 percentage points compared to the fourth quarter of 2022, in which GDP grew by 2.2%, but it did change the dynamic of the third quarter to a positive trend. In its January 2024 monetary policy report, the technical team of the Banco de la República projects economic growth of 0.8% for 2024.
Graph 1. Annual growth rate, by quarter, of GDP between 2019 and 2023, Colombia and Bogotá
4.2 ECONOMIC MONITORING INDICATOR (EMI)
According to the Economic Monitoring Indicator (EMI), for the month of January 2024, the EMI in its original series was located at 114.39, which represented growth of 1.60% compared to the month of January, 2023.
Source: DANE, EMI
In January 2023, the activities that showed the greatest monthly growth of the EMI were agriculture, livestock, hunting and mining and quarrying with 8.1% and public administration and defense, education, health and entertainment with 7.8%. %. Regarding annual growth, the activities of agriculture, livestock, hunting, and mining and quarrying showed the greatest growth in the EMI with 10.3%. Likewise, the activity with the greatest annual decline in the economic monitoring indicator in the last year was the manufacturing and construction industries, with an annual variation of -5% for January 2024.
4.3 INFLATION
Colombia and Bogotá experienced a decrease in the monthly price variation in February 2024 compared to the same month of the previous year. In February 2023, the monthly variation in Colombia was 1.66% and in Bogotá 1.89%, while, in February 2024, it was 1.09% and 1.37%, respectively. This decrease indicates lower inflationary pressure in the Colombian economy.
Graph 2. Annual growth of the Economic Monitoring Indicator (EMI)
Colombia's annual price variation decreased from 13.28% in February 2023 to 7.74% in February 2024, while the annual price variation in February 2024 in the capital shows a decrease of 5.33 percentage points compared to the same month of 2023, from 12.94% to 7.61%.
The price variation data by spending division in Colombia for February 2024 shows that only Recreation and Culture presented a negative variation (-0.06%). In Bogotá, the Education spending division rose by 8.27%, while the Alcoholic Beverages and Tobacco division rose by 1.53%. In Bogotá, no spending division presented negative variations, however, the divisions with the lowest variation were Recreation and Culture with 0.06%, and health, with 0.31%.
With regard to the spending divisions in Colombia, for February 2024, the Education division presented the greatest variation at 8.74%, followed by Restaurants and hotels, and Alcoholic beverages and tobacco, with variations of 1.13%, for both divisions.
Regarding the intervention rate, the Banco de la República continues with its strong policy and high rates, which for the month of February 2024, was 12.75%. Additionally, the monetary authority in its January monetary policy report projected total and basic inflation of 5.9% and 5.4% for 2024, respectively.
4.4 LABOR MARKET
Employment has shown improvement compared to the previous year; at the national level, the unemployment rate in January 2024 was 13.7%, 1.0 p.p. lower than in January 2023. Likewise, the occupancy rate has risen 0.6 p.p. in the last year, reaching 55.3% for January 2024. The global participation rate varied by 0.1 p.p. and stood at 63.3% in January 2024.
In Bogotá and its metropolitan area, the unemployment rate was 10.3% for the moving quarter Nov 23Jan 24, slightly lower than the 10.6% for the national total for the same period. For this same moving quarter, the capital had an occupancy rate of 63.4%, 6.4 p.p. above national occupancy, which stood at 57.0%. The data shows that more people of working age are participating in the labor market in the capital (70.7%) than in the country (77.6%).
The number of employed persons grew by 533,000 from January 2023 to January 2024; likewise, the number of unemployed persons decreased by -6.4%, which means 220,000 fewer people in a nonemployed condition (previously called “unemployed”).
5. EVOLUTION OF FOREIGN TRADE
EXPORTS
In January 2024, Colombia experienced a growth in its exports of 1.3% compared to the same month of the previous year, Bogotá showed a growth of 32.0%, while Cundinamarca recorded a decrease of2.2%.
In January 2024, compared to the previous month, Colombia exported $3.75 billion FOB dollars. Bogotá, for its part, maintained positive growth, reaching $311.7 million FOB dollars for that month. Finally, Cundinamarca experienced a drop in its exports, only reaching $196.5 million.
In January 2024, total exports from the Bogotá-Cundinamarca region reached a total of $508.2 million FOB dollars. The United States stood out as the main destination of exports, with a total of $176 million FOB dollars, which is equivalent to 34.6% of the overall total.
Ecuador ranked second on the list of export destinations with $39 million FOB dollars, representing 7.6% of the total, while China came in third place with 29 million FOB dollars, and a share of 5.8%.
Peru, Brazil and Mexico also stood out as relevant destinations with $25 million (4.9%), 24 million (4.8%) and $23 million (4.5%) respectively. The Netherlands contributed 15 million (3.0%), and Venezuela and Chile contributed $13 million (2.5%) and $12 million (2.4%), respectively, to the region's exports.
Turkiye also played a notable role in exports, with $13 million (2.5%). Exports to other countries, grouped under "Other Countries", represented $139 million FOB dollars, 27.4% of the overall total.
Graph 2. Annual variation of Colombian exports in Bogotá and Cundinamarca 2021-2024 Source: DANE, International trade.
IMPORTS
In January 2024, Colombia's total imports reached $4.96 billion CIF dollars, experiencing a decrease of 10.3% compared to January 2023. Similarly, Bogotá showed a decrease in its imports of 16.6% compared to the same month of the previous year, at $2.45 billion CIF dollars in January 2024. And Bogotá's participation in national imports decreased as well, from 53.1% in January 2023 to 49.3% in January 2024.
Cundinamarca, for its part, experienced an increase in its imports, reaching $441 million CIF dollars in January 2024, which is a variation of 3.9% in relation to January 2023. Cundinamarca's participation in national imports increased, from 7.7% to 8.9% in the same period.
The Bogotá-Cundinamarca region, which includes Bogotá and Cundinamarca, recorded imports worth $2.89 billion CIF dollars in January 2024, a decrease of 14.0% compared to the same month of the previous year. The share of this region in national imports went from 60.7% in January 2023 to 58.2% in January 2024.
The region's main trading partners were China and the United States. China led with $748 million CIF dollars, representing 25.9% of the total, closely followed by the United States, which contributed $618 million CIF dollars, representing 21.4% of the total. These two countries represent almost half of all imports in the region (47.3%).
Mexico, with $168 million CIF dollars, ranked third, contributing 5.8% of the total. Brazil and the Netherlands also played a relevant role, contributing $132 million (4.6%) and $121 million (4.2%) respectively. France and Nigeria reached $104 and $86 million CIF dollars respectively, while Argentina and Vietnam contributed $71 and $65 million CIF dollars.
Finally, "Other Countries" contributed $774 million CIF dollars, representing 26.8% of the region's total imports, underscoring the diversity of import origins beyond the main trading partners.
6. FOREIGN DIRECT INVESTMENT
During the fourth quarter of 2023, the country received US$3.95 billion through FDI, equivalent to 3.9% of quarterly GDP, with a decrease of US$ 146 million compared to the same period in 2022, and of US$ 68 million compared to the immediately previous quarter.
For its part, in the total for 2023, FDI flows reached USD $17.18 billion (4.8% of GDP), US$ 264 million higher compared to 2022.
During the fourth quarter of 2023, FDI flows were mainly destined to finance productive projects in manufacturing (US$ 1.07 billion, 27%), financial and business services (US$ 936 million, 24%), mining and oil (US$ 738 million, 19%), electricity, gas and water (US$ 362 million, 9%) and commerce, restaurants and hotels (US$ 361 million, 9%).
Regarding FDI flows by country of origin, during the fourth quarter of 2023 resources came mainly from 4 countries: United States (US$ 1.69 billion), Spain (US$ 719 million), Anguilla (US$ 422 million), Switzerland (US$ 199 million), Mexico (US$ 158 million), Bermuda (US$ 142 million), Panama (US$ 141 million), and Netherlands (US$ 102 million, Chart 3). The decrease compared to the fourth quarter of 2022 in FDI (US$ 146 million) is mainly explained by lower investments from Panama, England, France, the Cayman Islands and Portugal, partially offset by higher investments received from Canada, Mexico, Bermuda, Spain and the United States.
Graph 6. Quarterly FDI flows Source: Banco de la República
7. SOURCES
For more information consult the Observatory of the Bogotá Chamber of Commerce. https://www.ccb.org.co/observatorio
DANE. National accounts. Recovered from: https://www.dane.gov.co/index.php/estadisticas-portema/cuentas-nacionales/cuentas-nacionales-trimestrales
DANE. Labor Market. Recovered from:
https://www.dane.gov.co/index.php/estadisticas-por-tema/mercado-laboral/empleo-y-desempleo
Commercial Registry, BCC, 2019 - 2020 – 2021 – 2022 – 2023 - 2024. Recovered from:
https://www.ccb.org.co/Inscripciones-y-renovaciones/Matricula-Mercantil/Boletines-del-RegistroMercantil
DANE. Social Pulse Survey. Recovered from: https://www.dane.gov.co/index.php/estadisticas-portema/encuesta-pulso-social
DANE, International Trade. Recovered from: https://www.dane.gov.co/index.php/estadisticas-portema/comercio-internacional
Banco de la República. https://www.banrep.gov.co/sites/default/files/nota_de_prensa_inversion_directa.pdf