Colombia Economic Outlook. September 2025

Summary

The Colombian economy will grow by 2.5% in 2025 and 2.7% in 2026, driven by domestic demand while investment begins a gradual recovery. Sticky inflation and fiscal challenges will condition the pace of interest rate cuts by the Central Bank.

Key points

• Key points:
• The Colombian economy will continue on a gradual acceleration path. Performance will be led by domestic consumption, but investment, particularly in construction, is expected to progressively gain traction.
• Inflation remains sticky, projected at 5.0% by the end of 2025 and 4.3% in 2026. This persistence, driven mainly by core inflation, will keep the Central Bank's policy rate at its current level for an extended period. It is estimated to end 2025 at 9.25% and then reach 8.50% by the end of 2026.
• Strong domestic demand is widening the trade deficit, deteriorating the economy's external balance. The current account deficit is projected to be 2.5% of GDP in 2025, rising to 3.3% in 2026, financed primarily by Foreign Direct Investment (FDI).
• An international environment of lower inflation and less restrictive interest rates provides some relief for global growth and financial conditions. In this context, the exchange rate has remained strong in recent months; however, we project a moderate depreciation by the end of 2025 and into 2026.
• Finally, this document outlines a set of recommendations to boost economic reactivation, fiscal adjustment, public management, social conditions, and productivity. These measures should pave the way for the necessary structural decisions required thereafter.

Geographies

Topics

Tags