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Published on Friday, March 14, 2025

Colombia | Where is the Colombian Economy Heading? A Recovery with Challenges

Summary

Colombia’s GDP will grow 2.5% in 2025 and 2.9% in 2026, driven by consumption and investment. Inflation will continue to decline but remain rigid in housing and energy. The external deficit will widen as domestic demand rises, while the central bank balances economic recovery with inflationary prudence.

Key points

  • Key points:
  • Consumption will remain the main driver of growth, but investment will play a key role. Lower interest rates and greater purchasing power will support household spending. However, investment recovery will determine the speed of growth. In 2025, machinery purchases and civil works will drive the sector, while in 2026, construction will experience a stronger rebound.
  • Growth driven by domestic demand will lead to a widening external deficit. With imports outpacing exports, the current account imbalance will deepen.
  • Interest rate cuts will be gradual and prudent, balancing recovery and stability. While monetary easing will support economic activity, the central bank will remain cautious amid inflationary pressures in housing and energy. Monetary policy will depend on exchange rate movements, fiscal balance and Federal Reserve decisions.
  • External conditions will continue to set the pace for Colombia’s economy. Volatility in commodity markets, along with global financial, trade, and monetary conditions, will continue to impact growth.

Geographies

Documents and files

Press article (PDF)

Where is the Colombian Economy Heading? A Recovery with Challenges

Spanish - March 14, 2025

Authors

MH
Mauricio Hernández BBVA Research - Principal Economist
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