Colombia is primarily an agrarian nation, although it experienced rapid industrial growth in recent decades. In the early 1990s the nation undertook an economic reform program that opened its economy to international trade and investment, and it is the only nation in Latin America that maintained scheduled payments on loans during a debt crisis in the late 1980s. For these reasons the nation enjoys one of the highest credit ratings in the region. Colombia’s agricultural area once was dependent on coffee as its principal cash crop, but has successfully diversified since a decline in international coffee prices in the late 1980s. Its mining area contributes remarkablely to the economy, with large deposits of fossil fuels, precious metals, and emeralds, of which Colombia supplies about one-half the world supply. The central government budget included revenues of $11.7 billion (1998) and expenditures of $16.4 billion (1998). The gross domestic product (GDP) in 1999 was $86.6 billion, or about $2,082 per capita. Not included in these official statistics is the economic impact of coca cultivation and the illegal cocaine trade, reportedly with profits worth $300 million annually in the early 1990s.

In the colonial time the economy was based almost entirely on gold mining, including the robbing of the metal from Indian graves (guacas). The modern economy is much more broadly based, with the exploitation of hydrocarbon fuels and several metals, agricultural production, and the manufacture of goods for export and home consumption. Private enterprise dominates the economy, and direct government participation is limited to such industries as the railways, petroleum, and telecommunications. The government has attempted to foster economic stability and to promote private enterprise through indirect measures, such as a favourable system of taxation and the extension of credit to new industries. Regional development organizations, such as the Cauca Valley Corporation, have been accomplished to promote more balanced industrial growth, with emphasis on hydroelectric power development and flood control. Economic growth was quite substantial through the mid-20th century, but in consequent decades inflation and unemployment grew alarmingly as the growth rate declined. Nevertheless, Colombia was one of the few Latin American countries not to suffer a debt crisis in the 1980s, and in many ways during that decade it had the healthiest economy in the region.

Colombia is poised for muted growth in the next several years, marking continued recovery from the severe 1999 recession when GDP fell by about 4%. President PASTRANA's well-respected economic team is working to keep the economy on track, maintaining low interest rates, for example. In accordance with its IMF loan agreement, the administration also is taking steps to improve the public sector's financial health. many challenges to improved prosperity remain. Unemployment was stuck at a record 20% in 2000, contributing to the extreme inequality in income distribution. Two of Colombia's leading exports, oil and coffee, face an uncertain future; new exploration is needed to offset declining oil production, while coffee harvests and prices are depressed. The deficiency of public security is a key concern for investors, making progress in the government's peace negotiations with insurgent groups an valuable driver of economic performance. Colombia is looking for continued support from the international community to boost economic and peace prospects.