Publications

The sensitivity on growth and employment might continue to shape the policy mix with a trade-off of a slower disinflation path. We expect the Medium Term Program (MTP), to be revised in early September, to have more color on the political preferences on near term growth outlook.

The United States faces global uncertainty in terms of trade policy, with forecasts of inflation and interest rate cuts. At the same time, the Colombian economy is recovering, with consumption driving the recovery. Unemployment rates are low and informality is on the rise.

Hard data confirmed a soft landing in 2Q25, while early 3Q25 indicators still signal weakness in activity. We maintain our 2025 GDP forecast at 3.5% for now, though risks are slightly tilted to the downside.

Formal employment reached a record high in July 2025 due to the incorporation of digital platform workers. Excluding this effect, there was a net destruction of jobs, in a context of declining investment and weak consumption.

GDP rose 2.1% y/y in Q2 2025, fueled by consumption, especially durable goods. Investment focused on machinery and civil works, but buildings weighed down growth. The 2025 forecast remains at 2.3%, with room for upside if positive trends strengthen.

July U.S. labor data show sharp hiring slowdown: 73k jobs added, prior months revised -258k, jobless rate at 4.2%, participation at 62.2%. Wage growth stagnates; health care sole driver. Market sees 89% odds of Fed rate cut in September.

Public spending in Colombia has grown faster than revenues, pushing the deficit and debt up to 61% of GDP. Fiscal sustainability requires aligning spending with actual revenues, defining the optimal size of the State, and prioritizing efficient investments that boost well-being and growth.

Inflation averaged 1.7% m/m in the last quarter, the lowest level in eight years (22% annualized). The monthly figure is in line with expectations (BBVA: 1.8%, REM-BCRA: 1.8%), so we maintain our projection of 28% y/y for 2025.