Colombia Outlook. December 2024

Summary

The Colombian economy consolidates a gradual recovery driven by domestic demand and investment. The moderation of inflation will allow the central bank to continue cutting interest rates, although fiscal challenges and the need to increase domestic savings persist.

Key points

• Key points:
• Colombia's GDP will grow by 2.0% in 2024, accelerating to 2.5% in 2025 and 3.2% in 2026, supported by private consumption and a greater dynamism in fixed investment, especially in civil works and machinery.
• Headline inflation will close 2024 at 5.1% and continue its downward path to reach 3.6% in 2025 and 3.1% in 2026, favored by the stabilization of food and non-food goods prices.
• The central bank will reduce its intervention interest rate to 9.25% by the end of 2024, projecting additional cuts that will place it at 6.50% during 2025 and 2026 to stimulate economic activity.
• The fiscal deficit will stand at 5.6% of GDP in 2024, decreasing to 4.7% in 2025, while the current account deficit will progressively widen to 3.5% in 2026 due to the increase in imports.
• The national unemployment rate will remain resilient, going from 10.0% in 2024 to 9.8% in 2026. Furthermore, the low gross domestic savings, situated at 10.5% of GDP, limits the capacity to finance long-term expansion.

Geographies

Topics

Tags