Although 2023 had an economic slowdown, the National Government feels optimistic due to the business figures presented by the Superintendence of Companies. In fact, Luis Carlos Reyes, Minister of Commerce, Industry and Tourism, emphasized that “what the figures show us is something that is, without a doubt, encouraging, but that can improve,” during the LR Forum ‘Multilatinas 2.0 the thousand that make the most’.
And it is not for less, well Figures from the Bank of the Republic revealed that Colombia’s investment abroad was US$1,000 million during the first quarterwith a growth of 9% compared to the same period last year.
The head of the portfolio, Luis Carlos Reyes, said in his speech that The promotion of international expansion of Colombian companies with strategic investments abroad is something they want and must promote. from the Ministry of Commerce, Industry and Tourism.
“It is time to build trust with an entrepreneurial State hand in hand with the private sector. We have the economic capacity as a country to achieve great things and that is achieved by acting collectively.”Reyes stressed during his speech.
The senior official highlighted that, If Colombian companies do well in their own country, they are more likely to have sufficient resources to undertake projects abroad.. For example, the good results that multilatinas such as ISA, a subsidiary of Ecopetrol, Grupo Energía Bogotá and Grupo EPM have had, have allowed them to maintain important investments, especially in Central and South America.
For example, ISA reported in November 2023 that the investment potential it saw in projects for 2024 exceeded US$14 billion and that included initiatives in Chile, Brazil, Peru and Panama. Of the Capex invested in part of 2023, Brazil represented 40% of the investments, while Chile was 17%. The same happens with Grupo EPM, which this year also plans to consolidate investments in Panama, Guatemala and El Salvador.
Promoting this type of investment is important, according to the minister, because It is a tool to generate prosperity for Colombians, through mechanisms such as the knowledge that is acquired with foreign investment, and that this is brought back to Colombia.to empower companies and others that are in the same business ecosystem.
Luis Carlos Reyes highlighted this by saying that “What is sought is to strengthen Colombia’s industrial policy. We are seeking to strengthen this measure and we have to learn from past investments. Industrial policy, when it works, is a policy oriented towards the outside, so the national industry must be articulated and from the Ministry we can have that strengthening of production, which comes from acting jointly in a national work project.
Reyes, who is just in the portfolio, has the idea of reforming the industrialization policybut what, If this industrial measure is to be achieved, it must focus on Colombia’s investments in foreign markets. “These data are a trend that we would like to continue maintaining,” the minister stressed about the US$1 billion that were recorded in investments.
This good figure, which represented a growth of 99.6% compared to the same period of the previous year, is added to the surprising ISE in April, which reached 5.5%and which led analysts to point to a 2% growth at the end of the year.
The monthly variation between March and April was 2.0%, and so far in 2024, growth was 1.9%, well above the GDP of the first quarter (0.7%). These results forced some market analysts to adjust their economic projections for the remainder of this year.
“In short, after registering a poor performance for more than a year, it would seem that the economic dynamics are improving. Industry and commerce once again register positive variations after months in the red. Although, at Anif we estimate that economic growth would be 1.1% annually in 2024, given the recent positive results, our perspective is bullish in said projection,” says a report from the entity’s Center for Economic Studies.
Investments abroad
One of the ways to measure how much is invested abroad is through the Colombian Direct Investment Abroad indicator.Idce, which is prepared by the Bank of the Republic. Although This figure has been decreasing in the last 10 years, during 2024 it seems that it will begin to recover.
In 2018, the Idce totaled US$5,126 million, a figure that dropped in 2019 to US$3,153 million and fell drastically the following year (2020).due to the effects of the covid-19 pandemic, to US$1,733 million.
The indicator rises again in 2021 to US$3.18 billion; and in 2022 it increased a little more to US$3,383 millionbut the recovery trend slows in 2023, as the preliminary figure drops to US$1,174 million.
Taking this into account, the Minister of Commerce, Industry and Tourism stressed during the Forum that, To continue increasing investments abroad, tools such as the one that grants reimbursements to entrepreneurs must be strengthenedto export “high added value” merchandise, to improve Colombian exports to other parts of the world.
“We come from a trajectory in which the role of the market has been given preponderance as a driving force of the country’s development, but without conflicting with that role, which is why we want to strengthen private enterprise. We want to open the door to entrepreneurs, the ideas are clear, it is not a question of brainstorming, to achieve goals that as a country strengthen us all.”Reyes highlighted in his speech.
This optimism occurs amidst the uncertainty of Colombians’ confidence in commerce, since the Fenalco Economic Log revealed that commerce in Colombia completed its 17th consecutive month of decline in terms of sales in establishments. Not even Mother’s Day, one of the most important commercial dates for the country, was not enough for sales to rise, since 81% of the businessmen in the surveys assured that their sales were less than or equal to the that happened a year ago. At least 50% assured that the numbers were similar, while 31% assured that they fell. Only 19% reported improvement.
Jaime Alberto Cabal, president of Fenalco, assured that “what the Log suggests to us is that buyers use their credit cards less intensively, despite the reduction in interest rates. Many consumers are wary of the immediate future, fearing debt and postponing credit purchases. This situation is related to the uncertainty generated by the country’s political and economic outlook.”
Despite the results of the union’s Logbook, the Minister of Commerce concluded the Forum by saying that they want to “invite companies of all sizes to national investment,” since We have the economic capacity as a country to achieve “great things”. But always collectively between the state and private companies. “We are all at the service of a national project,” stressed the new Minister of Commerce.
The sectors that were most invested outside of Colombia
According to the report on Direct Investment of Colombia Abroad, Idce, from the Bank of the Republic, The sectors where the most resources were injected outside the country, in the first quarter of this year, were financial and business services, with US$594 million; manufacturing industries, with US$198.7 million; transportation, storage and communications, with US$108.7 million; commerce, restaurants and hotels, with US$74.9 million; and electricity, gas and water, with US$64.2 million. Those with fewer resources are agriculture, hunting, forestry and fishing.
