‘An Economy on Steroids’: First Quarter GDP Figures Confirm High Dependence on Public Spending

TL;DR

Colombia's economy in Q1 2026 showed a GDP growth of 2.2%, considered mediocre and below analysts' expectations.
Government final consumption expenditure increased by 7.8%, driving domestic demand and masking underlying economic weakness.
Key sectors like construction and extractive industries (coal, oil, gas) are in decline, with housing starts at a 16-year low.
The economy faces risks from potential El Niño weather patterns, international economic instability, and rising energy prices.
The incoming administration inherits a precarious fiscal situation with limited maneuverability due to high government spending.
An inevitable fiscal adjustment, likely involving spending cuts, is required to prevent a severe economic downturn and 'withdrawal syndrome' from unsustainable spending.

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