Colombia deficit could hit 5.8%
Colombia’s growing current account gap is a cause for considerable concern according to Bloomberg. The country’s current account deficit is forecast to hit 5.8 percent of GDP this year, up from 3.3 percent in 2013. The article cites a number of analysts – particularly Morgan Stanley – who point out that as Colombia’s economy continues to suffer from its reliance on oil, they may be hit hard by US interest rate increases.
Meanwhile Fitch has affirmed its stable rating for Bogota, pointing to the cities strong operating performance and conservative debt policy.
Norway and Colombia have issued a joint statement committing to enter into a climate change and anti-deforestation partnership by the end of the year. The deal would probably be similar to existing pacts that Norway has with a number of other countries, including Brazil, Indonesia and Peru, where they make payments for the protection of forests.
France’s Prime Minister Manuel Valls made a fleeting visit to Colombia to promote French business and support the peace process. He spoke at the Franco-Colombian Economic Forum on June 25 before the terrorist attack in Lyon forced him to return home the next day.
Sweden’s truck retailer, Scania, has signed a declaration of transparency and anti-corruption with the Colombian government as part of a new Swedish Corporate and Social Responsibility Network.
Beleaguered oil firm Pacific Rubiales, which operates Colombia’s largest oil field, are in the midst of a takeover battle. Shareholders were due to vote on a joint offer from Mexico’s ALFA and Harbour Energy on July 7, but the meeting has been pushed back to July 28 amid complaints from some investors who feel the deal – CAD$6.50 per share – does not reflect the true value of the company.
In spite of recent attacks on oil pipelines and infrastructure, analysts are holding firm on their outlook for Colombia’s state oil company, EcoPetrol. Standard & Poor’s have maintained their BBB rating, Moody’s maintain Baa2, while Zacks upgraded the stock from a ‘hold’ to a ‘buy’.
Gran Tierra Energy Inc. has announced an increased 2015 capital programme with a focus on Colombia. The company allocated an additional USD$55 million for Colombia, taking the total capital to USD$115 million, much of which will be spent on drilling in the Putumayo Basin.
Daimler opened a new bus plant in Funza, reflecting their expansion plans for Latin America.
In other news…
e-Marketer.com reports that Colombia has the third largest smartphone market in the region and predicts that by 2019, smartphones will account for 24.3 million – 69.7 percent of mobile phones.
Bloomberg reports that the Committee of Experts for Tax Fairness and Competitivity is considering cutting the withholding tax on bond profits for foreigners. The changes would be part of broader tax changes. The committee will report to Congress at the end of 2015.