Category: Colombia

Colombia’s government has said its 2006 budget deficit will be equivalent to 1.5% of GDP, slightly better than the 2% forecast. This compares with a balanced budget last year. The main contributing factor to the improved figures was the price of crude and the revenues of state-run Ecopetrol. The government is forecasting a deficit equal to 1.7% of GDP in 2007.

Colombian municipal telecoms operator Empresas Públicas de Medellín (EPM) has bought up Orbitel, the long-distance operator in which it had a 50% stake, from Grupo Sarmiento and Grupo Valorem for $85 million. The acquisition gives EPM additional services, such as VoIP, to offer customers.

Colombia’s rate of inflation in May slowed to 0.33%, the lowest month-on-month rise for May since 1986. Last year inflation for the month was 0.41%. Inflation for the year so far is running at 2.71%, compared with accumulated inflation of 3.51% for the first five months of 2005.

Colombia’s Congress has authorized the government to tap the international markets for up to $2 billion by issuing global bonds. The money raised will be used to fund the 2007 budget. The government has also been authorized to seek a further $2 billion in loans from multilateral organizations.

Colombian president, Alvaro Uribe, made history Sunday by becoming the first Colombian leader to be re-elected to serve two consecutive terms. Uribe was returned with 62% of the votes, beating nearest rival, Carlos Gaviria, who gained the backing of only 22% of Colombians. The president earned widespread voter approval as a result of his hard line on security issues and his successful management of the country’s economy. He persuaded Congress to make constitutional amendments to allow him to stand for re-election, arguing that he needed more time to complete his work. Meanwhile, in line with many other markets in the region, Colombian stocks bounced back after the dramatic slide of recent weeks. The benchmark stock index, the IGBC, rose 8% on Friday with a record number of transactions for the month. And the country’s Central Bank surprised economists by keeping interest rates unchanged; the benchmark overnight lending rate remains at 6.25%, confounding expectations of a 25 basis points rise.

Colombia’s president, Alvaro Uribe, looks set to be returned to office for another four-year term this Sunday. His record on national security, as well as economic management, have ensured approval ratings recently of around 60% and have seen investor confidence in the country boosted. His pro-free trade stance, as well as his program of privatization, are rare in the region. If returned to power, he will become the first Colombian president to serve two consecutive terms after Congress last year approved constitutional amendments allowing the president to stand for re-election.

Colombia’s state-owned electricity company Interconexión Eléctrica (ISA) and state-run Empresa de Energía de Bogotá (EEB) have bought a stake in Hydro-Quebec’s Peruvian subsidiary Consorcio TransMantaro. The companies paid $67 million for the 57% share in the Canadian company’s subsidiary. ISA is Colombia’s largest energy provider.

The food and beverages arm of Colombia’s largest conglomerate, GEA – Nacional de Chocolates – and Costa Rica’s Florida Ice & Farm (Fifco) have made an offer of $205 million to buy Pozuelo, the Costa Rican cookie and juice subsidiary of Spain’s Ebro Puleva. The acquisition will give the buyers around 28% of the Costa Rican cookie market. Pozuelo distributes its products throughout Central America and its acquisition by Chocolates fits with the company’s strategy of consolidating its distribution base in the region.

Colombia is to sell off the country’s largest state-owned bank – Bancafe – for no less than $451.44 million (1.09 trillion pesos), according to the government. The bank will be sold off to the highest bidder in the third-quarter of the year. Foreign and domestic banks will be permitted to bid for the institution. The sale of Bancafe will leave only one state-run bank – Banco Agrario – operating in Colombia.

Colombian retailer Almacenes Exito is planning to sell more shares via the Bogotá stock exchange. The details of the sale are not yet known but the company recently announced it will spend $150 million this year expanding its network of outlets in the country to meet increasing consumer demand and to counter growing competition.