Colombia: Time to recover

After last Sunday’s election round, right-wing candidate Iván Duque will face left-wing Gustavo Petro in a runoff for the presidency on June 17th. A Duque win appears likely, as he gathered 39% of the votes against 25% for Petro. Yet the support of Sergio Fajardo (23%) could boost the left-wing candidate. Duque would be positive news for markets as he vowed to cut corporate taxes and support the private sector, thus accelerating the investment recovery in the country. The pro-business candidate also backs the oil sector. Yet, his harder stance on the peace deal with the FARC – although he has softened it lately – could fuel social tensions. The worst is behind for the Colombian economy: higher oil prices, the infrastructure agenda and the tax reform should boost exports and investment. It should bring growth to around +2.5% in 2018 after +1.8% in 2017, albeit still below potential. The new government will also have to deal with the significant influx of Venezuelan migrants (over 1 mn since 2015).