25-May-2017
English
Growth in Colombia has been among the strongest in the region, reflecting the flexible exchange rate and inflation targeting monetary policy, and fiscal rules. The strong growth and welfare programmes to the most vulnerable groups have substantially reduced poverty. Lower taxes and fees on wages have brought more people to better quality formal jobs, thereby raising both productivity and inclusiveness. Productivity and job opportunities have also been enhanced by recent reforms facilitating the opening of business, obtaining construction permits, registering property and paying taxes. However, productivity growth is still low and the gap between rich and poor among the highest in Latin America. Informality and gender gaps remain high, and social mobility low. Years of armed conflict, stringent local regulations and distortions in the tax system have created disparities in productivity and access to basic services across regions. Further simplifying procedures for company registration and the affiliation of workers to social security, improving labour market programmes, expanding early childhood education, and raising education quality would boost inclusion, social mobility and living standards. Greater and more affordable child, elderly and disability care would open the job market to more women. Raising productivity will be fundamental to continued increases in living standards for all Colombians.
SPECIAL FEATURES: PRODUCTIVITY; INCLUSIVE GROWTH
18-September-2015
English
29-May-2015
English
Colombia is one of the most unequal countries in Latin America. The high level of informality in the labour market and many characteristics of the pension system leave many elderly in poverty. Only formal-sector employees earning more than the relatively high minimum wage are covered.
29-May-2015
English
Colombia needs a comprehensive tax reform that boosts revenues and shifts the tax burden to support more inclusive and green growth. Tax loopholes and exemptions that reduce the tax base and favour mainly the rich should be reduced significantly.
29-April-2015
English
Despite progress in the past decade, financial markets in Colombia remain relatively small and shallow. In particular the banking system suffers high intermediation costs, which limit constrains access to finance by households and firms.
29-April-2015
English
Colombia has engaged in a sustained process of fiscal decentralisation over the past decades. Evidence is presented that the current framework is conducive to fiscal sustainability, especially after the reforms in the late 1990s and early 2000s.
21-April-2015
English
The Colombian corporate tax system is highly complex and distortive. The effective tax burden on businesses is very high due to the combined effect of the corporate income tax, the corporate surtax introduced in 2012 (CREE), the net wealth tax on business assets and the value added tax (VAT) on fixed assets.
21-April-2015
English
Despite progress in the past decade, financial markets in Colombia remain relatively small and shallow. In particular the banking system suffers high intermediation costs, which limit constrains access to finance by households and firms.
26-March-2015
English
27-January-2015
English, PDF, 5,090kb
Colombia’s recent economic performance has been one of the most dynamic in Latin America. Embarking on a path toward inclusive growth is vital in the context of eradicating poverty, providing opportunities for its growing middle class and solidifying progress towards lasting peace. The road ahead to high-income status will be demanding and calls for major policy initiatives in education, innovation, infrastructure and rural development.