Displacing Investment
Economic Research Banco de Bogotá. 02.25.2026 19:54 Updated: 02.25.2026 19:54
TL;DR
- Colombia's economy grew 2.6% in 2025, below predictions, with public spending up over 7% and private sector/investment up less than 2%.
- Increased public debt and higher interest rates are identified as key drivers of crowding-out, displacing private investment.
- Policy decisions lacking technical basis and electoral uncertainty are further deterring investment in key sectors.
- Lower investment reduces productive capacity, decreasing potential economic growth from an estimated 3-4% to 2-3%.
- This reduced investment could double the time needed to double the size of the economy, from 20 years to nearly 30.