Political Risk Latin America Blog @PolRiskLatam

Colombia Business Forecast Report Q1 2010 – New Report Published

Posted in News and Articles, Political Risk by politicalrisklatam on January 13, 2010

by Official Spin at Official Wire, January 13, 2010.

Stable Rather Than Rapid Growth in 2010 A breakdown of Colombian GDP by sector paints a very mixed picture for the country’s growth potential in 2010 and beyond. Slumping demand for Colombian exports will continue to hurt the manufacturing and trade & hospitality sectors, whereas potential in the construction and finance should keep investment flows anchored, pointing to a stable but more moderate growth rate going forward.

While we continue to keep a close eye on Colombia’s deteriorating debt profile, a key factor affecting investor sentiment towards the country throughout the next 12 months is likely to be the ongoing uncertainty surrounding the country’s constitutional framework and the volatile relations with its Andean neighbours. T he ongoing re-election debate and poor relations between the president and the supreme court have encouraged us to downgrade Colombia’s long-term political risk ratings. While they are still favourable compared with those of its Andean neighbours, we are concerned about the damage caused to the country’s constitutional framework by President Alvaro Uribe‘s ongoing efforts to hold on to power. Political concerns are likely to be exacerbated in the near term by another round of diplomatic bickering between the Colombia and Venezuela governments. However, while this will no doubt hamper any short-term progress on improved trade relations, economic and political realities mean an outright military conflict between the two states remains highly unlikely, in our view…(continue reading)

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