Colombia has made impressive strides inreducing poverty and promoting shared prosperity during thelast decade. Extreme poverty fell from 17.7 percent in 2002to 8.1 percent in 2014, while total poverty (includingmoderate poverty) fell from 49.7 percent in 2002 to 29.5percent in 2014. The decline implies that 6.2 million peopleleft poverty in the period. The multidimensional povertyrate, which takes into account education, health, labor,childcare, and housing, has also experienced a remarkabledecline from 49 percent in 2003 to 21.9 percent in 2014. Thenumber of multidimensional poor declined by 9.8 million.Shared prosperity indicators followed a similar trend,especially after the second half of the decade. Between 2008and 2013, the income per capita of the bottom 40 percent ofColombians grew at an average rate of 6.6 percent,significantly higher than the national average rate of 4.1percent for the same period. Economic growth that led to jobcreation has been the main driver of poverty reduction andshared prosperity gains. The economy sustained an averageGDP growth of 4.4 percent during the 2000s, almost 2percentage points higher than the previous decade. For theperiod 2002-2013, economic growth explains 73 percent of thereduction in extreme poverty and 84 percent of the reductionin total poverty. Moreover, price stability, and inparticular stable food prices contribute to povertyoutcomes. As in the case of poverty reduction, labor incomegrowth is the main determinant of shared prosperity inrecent years in Colombia. Labor income represents at leastfifty percent of income growth for the poorest 10 percent ofthe population, and up to 70 percent for those in the fourthdecile, in the period 2008-2013. This evidence highlightsthe importance of high growth and low inflation forachieving the World Bank’s twin goals in Colombia.
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