BOGOTA, COLOMBIA — To say 2006 was a good year for the Colombian economy is to describe native pop phenomenon Shakira as a reasonably successful singer.
With exports, confidence and investment soaring, economic output here could finish the year having grown 6.3% from 2005, a full point above the robust expansion projected for all of Latin America.
Like most other Latin American economies that just ended a banner year, Colombia was boosted by the boom in commodities.
Exports of its coal, highly coveted by U.S. utilities because of its low sulfur content, have doubled in three years, bringing in close to $3 billion in foreign exchange.
Colombian oil revenue of about $6 billion is up 80% from 2004, thanks to global energy demand. And coffee growers are enjoying a tripling of bean prices since 2002, a result of worldwide consumption growth and severe weather that cut harvests last year in Brazil and Vietnam.
Even better news for Colombia and the rest of Latin America is that prices for a broad range of commodities -- notably gold, cooper, soybeans and cotton -- are expected to remain high in 2007, said economist Ken Shwedel of Rabobank in Mexico City.
That's because of the continued demand for raw materials and foodstuffs from Asia as well as the rapidly expanding biofuels industry, which has tightened supplies of sugar, corn and other crops.
"In a sense, the commodities boom is a favorable moment for Latin America, but it's a moment that could last several years," said Osvaldo Kacef, an economist at the United Nations' Economic Commission for Latin America and the Caribbean in Santiago, Chile.
Just as crucial to the surge in Colombia is the increased confidence that foreign and domestic investors have in its finances -- and thus its ability to weather the inevitable downturn in the market for those raw materials.
Colombia, like several other countries in the hemisphere, has used the windfall in foreign exchange generated from commodity sales to reduce its foreign debt and its fiscal deficit, said Lisa Schineller, a Standard & Poor's analyst in New York who specializes in Latin American bonds.
S&P recently gave Colombian bonds a positive outlook, meaning they might soon be upgraded.
The nation of about 45 million inhabitants is also revamping its tax system to reduce red ink further. It will impose a $4-billion wealth tax on its 6,000 richest citizens and biggest companies starting this year to finance the continuing war against leftist rebel groups.
