…because trade accounts for only a third of the economy, compared with a Latin American average of about half, Colombia has been sheltered from the worst of the global slowdown. The country also lacks the debt hangover of its western peers; credit is only a third of GDP, despite a mini credit-boom in mid-2007, when consumer lending grew more than 30 per cent.
As well as the peace dividend following the end of hostilities with insurgents, a burst of government spending in 2009, combined with swift interest rate cuts, helped keep the economy afloat. Colombia probably had Latin America's best economic performance last year.
But just as its slump was shallow, so may be the bounce-back. Fedesarollo, a think-tank, forecasts 2 per cent growth for 2010, versus a 3 per cent regional average. The new government faces a fiscal gap equivalent to 4 per cent of GDP. Furthermore, reinserting disbanded fighters into civilian life, plus reparations, could turn the peace dividend into a peace cost.
Colombia's so-called "doggie-paddle economy" – the stroke may be slow and inelegant but it is steady – has overcome far worse. Over the past century, the economy has only shrunk twice.
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