2015 Index of Economic Freedom


overall score71.7
world rank28
Rule of Law

Property Rights50.0

Freedom From Corruption36.0

Limited Government

Government Spending76.0

Fiscal Freedom80.3

Regulatory Efficiency

Business Freedom81.5

Labor Freedom81.7

Monetary Freedom80.1

Open Markets

Trade Freedom81.2

Investment Freedom80.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 47.2 million
  • GDP (PPP):
    • $527.6 billion
    • 4.3% growth
    • 4.1% 5-year compound annual growth
    • $11,189 per capita
  • Unemployment:
    • 10.5%
  • Inflation (CPI):
    • 2.0%
  • FDI Inflow:
    • $16.8 billion
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Colombia’s economic freedom score is 71.7, making its economy the 28th freest in the 2015 Index. Its overall score is 1.0 point higher than last year, with improvements in six of the 10 economic freedoms, including investment freedom, freedom from corruption, and trade freedom. Recording its highest score ever in the 2015 Index, Colombia has solidified its ranking as the 2nd freest out of 29 countries in the South and Central America/Caribbean region.

Over the past five years, economic freedom in Colombia has risen by 3.7 points as reform has gained momentum. Impressive gains in market openness include double-digit improvements in both investment and financial freedom and an 8.0-point improvement in trade freedom.

Colombia’s relatively open economy has benefited from a petrochemical boom and diminished threat of risk as the government engages in talks with the militant group FARC. This has allowed greater fiscal flexibility while the government implements a reform program to open the country further to trade, investment, and financial flows. Corruption is perceived as widespread.



President Juan Manuel Santos, elected in 2010 and re-elected in 2014, has tried to distance himself from former President Alvaro Uribe. Uribe’s “democratic security” agenda significantly reduced crime and violence and reestablished the state’s presence in rural areas. Uribe also boosted business confidence. Santos has made peace talks with FARC and ELN guerrillas the centerpiece of his government. He has promised that guerrillas will be given no immunity, but the FARC leadership has stated that it will not spend a single day in jail. Santos faces the challenge of delivering peace while ensuring justice for victims of the FARC and ELN. Colombia’s economy depends heavily on exports of petroleum, coffee, and cut flowers. It has replaced Argentina as Latin America’s third-largest economy, surpassed only by Brazil and Mexico. Colombia is a founding member of the Pacific Alliance. Inflation is low, and the poverty rate is decreasing.

Rule of LawView Methodology

Property Rights 50.0 Create a Graph using this measurement

Freedom From Corruption 36.0 Create a Graph using this measurement

Settlement of the 50-year internal conflict could strengthen governance in large areas of Colombia, but drug trafficking and the violence and corruption that it engenders will continue to erode institutions. Corruption occurs at multiple levels of public administration. The courts have demonstrated a degree of independence from the executive, but the justice system remains compromised by corruption and extortion.

Limited GovernmentView Methodology

Colombia’s top individual income tax rate is 33 percent, and its top corporate income tax rate is 25 percent. Other taxes include a value-added tax and a financial transactions tax. The overall tax burden is equivalent to 16.1 percent of domestic income. Total government expenditures account for 28.3 percent of the domestic economy, and public debt equals 32 percent of gross domestic product.

Regulatory EfficiencyView Methodology

Incorporating a business takes fewer than 10 procedures, with no paid-in minimum capital required, but completing licensing requirements remains time-consuming. The non-salary cost of hiring a worker is moderate, and regulation of work hours is relatively flexible. In 2014, the government reduced subsidies to coffee farmers in light of higher market prices. Other state subsidies remain below regional averages.

Open MarketsView Methodology

The average tariff rate is 4.4 percent. Colombia is a member of the Pacific Alliance with Chile, Costa Rica, Mexico, and Peru. Foreign and domestic investors are generally treated equally under the law. Following a decade of significant consolidation, private institutions dominate the growing financial sector. Credit is allocated on market terms, and foreign firms receive equal treatment. Access to long-term financing can be difficult.

Country's Score Over Time

Bar Graph of Colombia Economic Freedom Scores Over a Time Period

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Regional Ranking

rank country overall change
3Saint Lucia70.2-0.5
4The Bahamas68.7-1.1
5Uruguay 68.6-0.7
6Saint Vincent and the Grenadines681.0
9Jamaica 67.71.0
10Costa Rica 67.20.3
12El Salvador 65.7-0.5
13Trinidad and Tobago64.11.4
14Panama 64.10.7
15Paraguay 61.1-0.9
16Dominican Republic61-0.3
17Guatemala 60.4-0.8
18Nicaragua 57.6-0.8
19Honduras 57.40.3
28Venezuela 34.3-2.0
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