Colombia | Challenges, data and opportunities

Summary

Colombia grew 2.6% in 2025, driven by domestic demand and remittances, but faces a growing fiscal deficit, rising inflation and weaker private investment. In a global environment shaped by geopolitical tensions and tariffs, the country needs fiscal adjustment and private investment to sustain its growth potential.

Key points

• Key points:
• Colombia grew 2.6% in 2025, but the economy will slow from the second half of 2026 as financial conditions tighten and the expansionary cycle of durable goods consumption runs its course.
• The fiscal deficit stood at -6.4% of GDP at the end of 2025, with TES rates above 13%, meaning the next administration will need to act quickly to contain the rising cost of public debt.
• In 2025, remittances exceeded oil export revenues and represented 18.4% of total exports, cementing their role as a pillar of private consumption and a buffer against the growing external deficit.
• Banrep raised its rate to 10.25% in January 2026 and is projected to reach 12.25% as inflation is expected to close the year at 6.5%, pressured by minimum wage hikes, rents and energy prices, with cuts anticipated only toward end-2027.
• With fiscal space exhausted, boosting private investment is the key lever for sustainable growth, which requires institutional confidence, clear rules and reduced public absorption of financial resources.

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