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This country note from Going for Growth 2015 for Colombia identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
Angel Gurría has presented President Santos with our report “Colombia: Policy Priorities for Inclusive Development”. This report supplements the Economic Survey of Colombia released on 19 January, reflecting the close co-operation between the OECD and the Colombian Government in designing the National Development Plan 2014-2018, which seeks to bring about a Colombia where there is peace, greater equity and better education.
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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.
Diversifying the economy and reducing labour informality are key challenges. A tax reform is crucial to boost investment and to make the tax burden fairer. An in-depth reform of the pension system would reduce old-age poverty and inequality.
The Colombian economy has done remarkably well over the last decade, consistently ranking among the fastest-growing countries in Latin America, but a comprehensive tax reform that promotes investment and diversifies the economy is now needed to put the country on a path toward stronger, sustainable and inclusive growth, according to the latest OECD Economic Survey of Colombia.
The global scenario is less benign for the region due to a downturn in global trade, a decline in commodity prices and increased uncertainty surrounding external financing, says the new Latin American Economic Outlook.
After a decade of relatively strong growth, Latin America is facing headwinds associated with declining trade, a moderation in commodity prices and increasing uncertainty over external financial conditions, according to the latest Latin American Economic Outlook jointly produced by the OECD Development Centre, the UN Economic Commission for Latin America and the Caribbean (UN ECLAC) and CAF - Development Bank of Latin America.
Income inequality in Colombia has declined since the early 2000s but remains very high by international standards. While most of the inequality originates from the labour market, wealth – and thus capital income – is also highly concentrated and the tax and transfer system has little redistributive impact.
Income inequality in Colombia has declined since the early 2000s but remains very high by international standards. Income dispersion largely originates from the labour market, which is characterised by a still high unemployment rate, a pervasive informal sector and a wide wage dispersion reflecting a large education premium for those with higher education.
The Colombian economy is strong and the outlook is promising, but the country must do more to ensure that the ongoing commodities boom contributes to sustainable and inclusive growth over the long-term, according to the OECD’s latest Economic Assessment of Colombia.