The Source That Runs Dry
The Colombian economy would grow below 3%. Photo: Courtesy: Istock
TL;DR
- Colombia's economic activity grew only 1.4% in January, marking four consecutive months of slowdown and the lowest growth since November 2024.
- The GDP expansion decelerated to 2.2% annually in the fourth quarter, with all demand components losing momentum.
- Internal demand fell 1.0% quarter-over-quarter, primarily due to stagnant household consumption and the depletion of previous growth drivers.
- Remittances are expected to decline in 2026, and coffee revenues face pressure from lower international prices and weather-related production issues.
- Limited fiscal space requires an adjustment, and a disproportionate minimum wage increase is negatively impacting employment and increasing living costs.
- Investment deterioration is evident, with significant setbacks in industry and construction, crucial sectors for economic growth.
- The economy is now projected to grow around 2% (revised to 2.3%) in 2026, below the initial 3% forecast, with risks tilted downwards.
- Without a decisive rebound in investment and exports, the economy risks remaining in a low-growth trajectory with increased external vulnerability.