Colombia: Befriending markets

5 min
Georges Dib
Georges Dib Economist for Latin America, Spain and Portugal

Last Sunday, Iván Duque (right-wing, 54% of the vote) beat Gustavo Petro (left-wing, 42%) in the run-off at the presidential election. The victory of the market-friendly Duque – who will be sworn in for a four-year mandate on 7 August – is yet another positive sign for the economy (see also WERO 30 May 2018). Colombia is one of a few major emerging markets whose currency has appreciated in 2018 year to date (+2.2%). This has been facilitated by oil price developments which are encouraging for Colombian oil exports that account for one third of total exports. It should also support the country’s ongoing fiscal consolidation. Yet Duque’s challenges are numerous: dealing with the Venezuelan migrant crisis, restoring state capacity in power vacuum areas left by the FARC after the peace deal, curbing cocaine production and attracting investment while diversifying the economy.