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In July, the Central Bank of Colombia kept the policy rate at 9.25% in a split decision. Although headline inflation eased slightly and economic activity showed more momentum, the Board highlighted the stability of core inflation and inflation expectations, as well as strong domestic demand, justifying a restrictive stance.

Household spending has emerged as Colombia’s main growth engine in 2025, driven by rising income, improving credit, strong remittances, and renewed consumer confidence. Despite early signs of labor market cooling, consumption remains the key economic driver.

Colombia's annual inflation for June 2025 stood at 4.8%, with a monthly variation of 0.10%, lower than the 0.19% expected by analysts. This marks the first time it has been below 5.0% since October 2021. The moderation was explained by the food and regulated items baskets.

The national unemployment rate for May 2025 was 9.0%, lower than 10.3% a year ago and the lowest for a May in the last 24 years. Seasonally adjusted, the rate showed a decreasing trend between June 2024 and April 2025 and was around 9% in the March-May 2025 period.

The Bank of the Republic maintained the policy rate at 9.25% in June, with a divided decision. While inflation showed a marginal reduction and growth continues a gradual recovery, they emphasized the larger estimated fiscal deficit and its effect on the economy and the Bank's interest rate profile.

Oil prices have experienced high volatility this year. Lower global demand and increased supply from OPEC+ have driven a bearish trend, which was recently interrupted by tensions between Israel and Iran. The outlook remains uncertain, especially concerning a potential blockade of the Strait of Hormuz.

Colombia’s economy gains traction through consumption and easing interest rates, while investment gradually recovers. Inflation is declining, yet fiscal risks persist. Global uncertainty—with trade and financial tensions—adds pressure. Moderate growth is forecast for 2025 and 2026.

Inflation in Colombia eased in May 2025, reaching 5.05% annually, its lowest in 43 months, with a monthly change of 0.32%. This moderation was mainly driven by the non-food basket, led by services and regulated items, correcting April's uptick and paving the way for gradual rate cuts by the Central Bank.