05.06.2026
Colombia’s economy accelerated in 2025, supported by private consumption, public spending, remittances and resilient labour markets. Growth is expected to moderate in 2026 before improving gradually in 2027 as inflation pressures ease and investment recovers. Inflation remains above the 3% target and is likely to keep monetary policy cautious, especially after a large minimum-wage increase. Fiscal risks have increased following the deterioration of public accounts and the temporary suspension of the fiscal rule. The external position remains manageable, but weaker oil and mining exports, strong imports and lower FDI inflows remain important vulnerabilities.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 2.6 | 2.2 | 2.4 |
| Inflation (%, yoy) | 5.1 | 6.1 | 5.1 |
| Employment rate (% of working-age population, 15+) | 57.6 | 57.6 | 57.6 |
| Fiscal balance (% of GDP) | -5.6 | -4.9 | -4.0 |
| Gross public debt (% of GDP) | 66.5 | 66.6 | 66.0 |
| Current account balance (% of GDP) | -2.4 | -2.1 | -2.7 |
Growth moderates after a consumption-led acceleration
Colombia’s real GDP growth rose to 2.6% in 2025, up from 1.5% in 2024. Growth was driven mainly by private consumption and government spending. Private consumption was supported by real income gains, record remittances, resilient labour markets and elevated coffee prices, while public spending increased as the government cleared investment backlogs and expanded civil works.
Growth is projected to moderate to 2.2% in 2026 as rising inflation, tighter monetary conditions and fiscal uncertainty cool demand and constrain private investment. A gradual recovery to 2.4% is expected in 2027, supported by easing inflation pressures, a partial recovery in investment and continued services growth. However, medium-term growth remains constrained by weak productivity, low investment, infrastructure gaps and limited export diversification.
Inflation remains above target
Inflation declined from 6.6% in 2024 to 5.1% in 2025, helped by peso appreciation. However, disinflation paused during the year, with services and regulated prices remaining sticky. Inflation is projected to rise again to 6.1% in 2026, partly reflecting the record minimum-wage increase and higher global oil prices, before easing back to 5.1% in 2027.
The central bank has only limited room to ease monetary policy while inflation remains above target and fiscal risks are elevated. Stronger wage-driven inflation, exchange-rate volatility, fuel prices and food-price shocks could keep inflation higher for longer.
Fiscal risks have increased
Colombia’s fiscal position deteriorated further in 2025. The overall fiscal deficit reached 5.6% of GDP, while the primary deficit widened to 2.6% of GDP, the largest outside the pandemic period. The deterioration led to the temporary suspension of the fiscal rule for 2025–2027 and contributed to sovereign rating downgrades.
The fiscal deficit is projected to narrow to 4.9% of GDP in 2026 and 4.0% in 2027, but achieving this path will require credible consolidation. Public debt is expected to remain elevated, at around 66% of GDP. Structural reforms to raise tax revenue, reduce budget rigidities, improve spending efficiency and rebuild fiscal credibility will be essential.
External position remains manageable but exposed
The current account deficit widened to 2.4% of GDP in 2025 as stronger imports and weaker oil and mining export receipts outweighed record remittances. Net FDI inflows fell to their lowest level in 15 years, while reserves remained comfortable.
The deficit is projected to narrow to 2.1% of GDP in 2026, supported by higher oil export receipts, before widening again to 2.7% in 2027 as domestic demand and imports recover. Colombia remains exposed to oil prices, coal and mining output, remittance flows, global financing conditions and investor confidence.
Overall outlook
Colombia’s outlook remains stable but fragile. Growth is expected to stay moderate in 2026–2027, inflation will remain above target, and fiscal credibility has weakened. The main policy challenge is to restore fiscal discipline without undermining growth and social protection. Sustained improvement will depend on tax reform, better public spending, stronger private investment, export diversification, infrastructure improvements and policies that raise productivity and formal employment.
Sources:
World Bank, Colombia Macro Poverty Outlook, April 2026.
International Monetary Fund, Colombia: 2025 Article IV Consultation and Staff Report, September 2025.
International Monetary Fund, World Economic Outlook, April 2026.
Banco de la República, Monetary Policy Report, April 2026.
OECD, Economic Outlook and Colombia country materials, 2025–2026.
