Long-Term Opportunity In Colombia
Colombia is quickly gaining traction as one of the most exciting economies to be involved in. Multinational firms Starbucks and Krispy Kreme are in the process of opening stores in the country, as incomes rise across all demographics and income equality converges.
The third largest economy in Latin America, Colombia has a young and growing population with, for the first time, large-scale access to credit. According to Bancolombia, consumer loans have risen sixfold over the past decade. Consumption now accounts for two-thirds of the economy, while the middle class has doubled to 30% over the last decade. In our Latin America risk/reward ratings, BMI ranks Colombia fourth in the region, behind the much larger economies of Brazil and Mexico, as well as Chile. Once characterised as a country largely dominated by anarchy, Colombia now ranks on a par with Brazil and Mexico in our risk ratings, above Peru and Argentina.
These factors have proven to be the carrot attracting multinational firms into the country, particularly from the food and drink and mass grocery retail (MGR) sector. Already established in Colombia are fast food chains Burger King and McDonald's, and Chilean retailer Cencosud. Last year, Burger King announced that it was teaming up with Colombian private equity fund Promotora in order to try to increase their store numbers to 100 by 2017. Likewise, last year Cencosud finalised its entry into Colombia's MGR sector by taking over French firm Carrefour's 92 stores in the country.
|GDP And Food Consumption Per Capita (Local Currency)|