Published on Wednesday, December 3, 2025

Colombia Economic Outlook. December 2025

Summary

Between 2025 and 2027, GDP will be driven by domestic demand: resilient household consumption, supportive public spending and investment boosted by a healthier construction sector. Persistently high inflation, cautious monetary policy and a wide fiscal deficit weigh on the outlook.

Key points

Key points:
Global activity over 2025–2027 is expected to grow around 3.2%, supported by AI-driven investment, fiscal stimulus, lower interest rates and cheaper energy, which offset part of the drag from protectionism, migration barriers and geopolitical tensions. Latin America enters this phase with disinflation underway and central banks moving into a slower, data-dependent easing cycle.
GDP is forecast to expand by 2.7% in 2025 and 2.8% in both 2026 and 2027. Throughout this period, domestic demand remains the main growth engine, while net external demand subtracts from growth in 2025 and gradually improves thereafter, leading to a slightly more balanced, yet still domestically driven, expansion.
Fixed investment shows a mixed pattern. Machinery and equipment cools in 2026 amid softer demand for goods, a shift toward services and still-high real interest rates, whereas construction gains traction through civil works, major infrastructure projects and a step-by-step recovery in non-residential buildings and housing from depressed levels.
Inflation has stayed above 5%, with pressures in food, core goods and regulated prices. In response, the central bank keeps a clearly restrictive stance: the policy rate is expected to remain at 9.25% throughout 2025 and 2026, with cuts only from 2027 onwards, as the Board focuses on expectations and on a gradual return of inflation to target.
Looking ahead, reducing the “Colombia cost” is essential to unlock investment. Priorities include regulatory simplification, a more investment-friendly tax and labour framework, better logistics and infrastructure, deeper local capital markets, stronger security and justice, and faster AI adoption in firms and government, supporting stronger and less inflation-prone growth.