Mariscal Sucre Airport, Quito, Ecuador.

Political and economic environment

Various macroeconomic and political factors affected the different countries of South America during 2016, generating a slowdown in the region. The fall of commodities prices in the first quarter, the imbalance in external accounts and the volatility of exchange rates were factors that impacted the majority of the States. All in all, the region grew less than 0.5% and, with exceptions, positive growths were observed, including Colombia with 2% growth. At the same time, Central America and the Caribbean were favored by better fuel prices, given they are net importers, by the flow of remittances and good performance of their business partners.

The United States continued on its recovery path and showed an encouraging dynamic in its indicators. With a positive growth of 1.6%, low levels of unemployment (4.7%) and good performance of the construction industry, which for the first time reached record highs since 2008 in housing starts and building permits for nearly a million housing units.

Regarding politics, 2016 was a year of profound changes, marked primarily by the uncertainty in various geographies and a volatile environment, which, in some circumstances, made the future of the markets and the dynamics of business uncertain. In Colombia, the ups and downs of the peace process and tax reform led to cautious performances by the investing public.

In the midst of these complex scenarios, Grupo Argos is pleased to deliver positive results for 2016. A disciplined and consistent behavior, in addition to the countercyclical contribution of the different markets where we have presence led to positive annual results. The simultaneous exposure to developed and emerging economies improves the balance of risks, allowing reduction of rates of access to capital and facilitating the adoption of best practices and the development of human talent with global standards.