Colombia Economic Outlook. June 2026

Summary

Colombia's economy will grow 2.6% in 2026 and 2.1% in 2027 driven by private consumption, amid global geopolitical tensions and cautious monetary policy. Activity faces challenges from weak investment, persistent inflation, and fiscal sustainability pressures.

Key points

• Key points:
• Real GDP is expected to increase by 2.6% in 2026 before moderating to 2.1% in 2027, while domestic demand will expand by 2.9% and 2.3%, respectively, reflecting a gradual strengthening of economic activity.
• Private consumption will grow by 3.0% in 2026 and 2.4% in 2027, supported by the services sector. Meanwhile, labor market conditions are expected to soften, with the average unemployment rate rising from 9.2% to 9.7%.
• Fixed investment will increase by only 1.2% in 2026 and 1.4% in 2027. Within this, residential investment will grow by 0.5% in 2026 before accelerating to 5.5% in 2027. Investment in machinery is expected to weaken as a result of higher interest rates.
• Annual inflation is projected to end 2026 at 7.0% and decline to 5.6% in 2027, prompting Banco de la República to raise the policy rate to 12.25% and maintain a restrictive monetary stance before beginning an easing cycle toward the end of 2027.
• The central government fiscal deficit is forecast at 6.7% of GDP in 2026 and 6.2% in 2027. Meanwhile, the exchange rate is expected to average COP 3,628 per U.S. dollar in 2026 before depreciating to an average of COP 3,698 per U.S. dollar in 2027.

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