Colombia - CounTry Outlook

COLOMBIA

The Economist Intelligence Unit

Country outlook

COUNTRY VIEW

After winning re-election in May 2006, the president, Alvaro Uribe, will remain in power until 2010. In spite of a strengthened popular mandate and a working majority in Congress, his political capital is diminishing. Reported links between several of Mr Uribe's congressional supporters and the demobilised Autodefensas Unidas de Colombia (AUC) will tarnish the president's reputation and detract from the legislative agenda. Despite some improvements, public security will remain poor, particularly in some rural areas. A negotiated end to the conflict with the Fuerzas Armadas Revolucionarias de Colombia (FARC) is unlikely. The Economist Intelligence Unit expects Mr Uribe to retain a prudent economic policy. GDP growth will slow gradually, but remain solid, averaging 4.5% in 2007-08. The current-account deficit will widen to 2.4% of GDP in 2008, but will be fully financed by strong investment inflows.

Domestic politics: Mr Uribe, who began a second four-year term in August 2006, will face significant challenges in the forecast period. Although he won a comfortable