Colombia

Geography
Pa na m

Ca

ea ibb

nS

ea

Area Capital

1,138,910km2 Bogot

Ve n

ez

Demography
Population Density Urbanisation Ofcial language 46.8m 41 inhab./km2 75% Spanish
O

ue

la

an

Economy
GDP per capita US$2290 Currency Colombian peso (COP) Per capita cement consumption 167kg

Pa ci

ce

Bogot

Ec

ua

do

r
Br
become less supportive. Energy prices are forecast to decline in 2007-08, but remain high on a historical basis, which will support Colombias scal and external accounts. In the US, which currently purchases 40 per cent of Colombias exports, there is the risk of recession, which would damage Colombias growth prospects and external position. The government expects GDP growth to slow to ve per cent in 2007, reecting more moderate investment growth and a gradual acceleration of private consumption growth. Although levels of violence associated with the internal conict and drugtrafcking have fallen, they remain high by international standards and are unlikely to decline much further over the next couple of years. An outright victory over the largest guerrilla group, the Fuerzas Armadas Revolucionarias de Colombia (FARC), is unlikely.

Pe

ru

The Colombian cement industry has seen an eventful two years including the demise of Cementos Andino and allegations of price xing. Nevertheless, the local market is expanding rapidly, reaching levels last seen a decade ago pre-recession, and the outlook is positive. The industrys increased exposure to US exports, however, may present a challenge in the short-term.

fter several successes in his rst term in ofce (2002-06), including curbing guerrilla violence, reducing crime and reviving economic growth, president Alvaro Uribe was re-elected in the May 2006 presidential election for a second term, which will run until 2010. Improving public nances, reducing ination and boosting growth will remain the focus of his administration. Reducing public debt, which stands at around 45 per cent of GDP and is one of Colombias main weaknesses, and a key priority. GDP accelerated to around 6.3 per cent in 2006, driven by strong investment which reached 26 per cent of GDP. Industrial production increased by 11.1 per cent in 2006, the fastest annual output growth in two years. Total output of all construction materials was up by 40.3 per cent YoY in December. The current account decit widened to US$2bn in January-September 2006, compared with US$1.6bn in the same

period of 2005, owing to strong import growth, which reduced the countrys trade surplus. The budget decit in 2006 stood at US$1.21bn, equivalent of 0.9 per cent of the countrys GDP. Interest rates reached 8.5 per cent at the end of 2006 as the central bank continues to try and reign in ination. The trailing 12-month ination reached 5.25 per cent in February 2007, well above the central banks target of between 3.5 per cent to 4.5 per cent for full-year 2007. Having continued to rise in the rst quarter of 2007, but is expected to ultimately stabilise at around four per cent. The peso weakened marginally in 2006, following strong appreciation in 2005, and was trading at COP2200: US$1 in the rst quarter of 2007. Economic policymaking will remain prudent during 2007-11, but the Colombian government will face rising challenges as external conditions

Consumption
Domestic cement consumption grew an extraordinary 36.1 per cent in 2005, followed by a more modest growth of 2.1 per cent in 2006 when total demand reached 7.96Mt. At 167kg, per capita consumption is less than half the world average, but it is climbing at a spirited pace.

104

THE GLOBAL CEMENT REPORT

az

il