Thursday, September 10, 2015

Despite sputtering oil production, Colombian economy continues to grow

Colombia’s once-booming oil industry is in full-on crisis mode, the country’s currency is in free fall, and yet not only is Colombia’s economy continuing to grow, but it’s picking up speed.

According to the DANE, the national Colombian statistics institute, the country’s GDP increased by 3% over the previous year during the second quarter of 2015. This beat both analysts’ prediction of 2.9% growth and the 2.8% growth in the first quarter of the year.

Nonetheless, Colombia’s financial leaders are not pausing to pat themselves on the back. They need only look to Brazil, Chile, or Mexico, whose economic growth trailed Colombia’s for the quarter, or even next door at Venezuela, whose economy is expected to contract by 7% this year. The Financial Times explained that, “There is concern but no panic.”

Despite this good news, the Colombian oil industry appears to finally be entering a much-predicted slow decline. The Colombian Ministry of Mines and Energy released the oil production numbers for August, showing that Colombia produced on average just 966,000 barrels of oil per day (bpd). Although this represents an increase of 2.21% over the daily production average in July, it’s a 3.3% fall from the figure for the same month last year.


And this time, the industry can’t blame the country’s important Caño Limón pipeline. Although the pipeline is still shut down for repairs, production in the oil field has remained steady.

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