Colombia Economic Outlook
Improving economy:
Colombia is the fourth-largest economy in Latin America, with a GDP of around USD 400 billion, and a population of 52 million. Colombia has consistently grown faster than the Latin American average over the past decade, supported by the peace deal with FARC guerrilla movement in 2016, but remains notably poorer than the regional average in per capita terms. It is a member of the Pacific Alliance trade bloc along with fellow members Chile, Mexico and Peru, and joined the OECD in 2020.
Diverse economic structure:While services—particularly retail, tourism, and professional services—form the backbone of the economy, Colombia also has sizeable agricultural, manufacturing and mining sectors, with key exports including coal, coffee, gold and oil. The U.S. and China are by far the country's largest trading partners.
Political uncertainty:The government of leftist Gustavo Petro has attempted to increase the government's role in the provision of public services and reduce the country's dependence on hydrocarbons, though with limited success due to parliamentary pushback. Ensuing political uncertainty over the government's reform agenda and fiscal position has spurred volatility in the peso.
Challenges:Colombia faces myriad risks, including extreme climatic events, elevated economic inequality spurring social unrest—such as that which occurred in 2021—swings in hydrocarbon prices impacting fiscal revenues, a resurgence in emigration from Venezuela and a rise in violent crime.
Colombia economic outlook:Colombia has significant potential for growth, thanks to a large and growing consumer market and abundant natural resources. GDP growth should outpace the Latin America average over our forecast horizon. That said, activity will likely continue to be held back by a weak education system, poor infrastructure and persistent insecurity in some areas of the country.
Colombia's Macroeconomic Analysis:
Nominal GDP of USD 364 billion in 2023.
GDP per capita of USD 6,963 compared to the global average of USD 10,589.
Average real GDP growth of 3% over the last decade.
Sector Analysis
In 2022, services accounted for 57% of overall GDP, manufacturing 11%, other industrial activity 23%, and agriculture 9%. Looking at GDP by expenditure, private consumption accounted for 78% of GDP in 2023, government consumption 15%, fixed investment 13%, and net exports -6%.International trade
In 2021, manufactured products made up 20% of total merchandise exports, mineral fuels 51%, food 16%, ores and metals 2% and agricultural raw materials 5%, with other categories accounting for 6% of the total. In the same period, manufactured products made up 72% of total merchandise imports, mineral fuels 10%, food 14%, ores and metals 2% and agricultural raw materials 1%, with other goods accounting for 1% of the total. Total exports were worth USD 53 billion in 2023, while total imports were USD 59 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 3.0% in the decade to 2023. The pandemic then provoked a deep recession followed a sharp rebound. However, in 2023, growth slowed to a near standstill, due to high inflation and interest rates, and President Petro's unfriendly stance towards the business sector hampering investment. To read more about GDP growth in Colombia, go to our dedicated page.
Fiscal policy
Colombia's fiscal deficit averaged 4.1% of GDP in the decade to 2023. By 2022, amidst economic recovery, Colombia managed to narrow the fiscal deficit, though it remained wider than pre-pandemic levels. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 11.0% in the decade to 2024. The COVID-19 pandemic in 2020 significantly increased unemployment. The rate has declined since, but remains high by regional standards. For more information on Colombia's unemployment click here.
Inflation
Inflation averaged 5.5% in the decade to 2024. However, following the COVID-19 pandemic there was an increase in inflation into double digits, reflecting large currency depreciation, supply chain disruptions and high global commodity prices. Go to our Colombia inflation page for extra insight.
Monetary Policy
Colombia's monetary policy rate ended 2024 at 9.50%, up from 4.50% a decade earlier. See our Colombia monetary policy page for additional details.
Exchange Rate
Colombia's exchange rate has tended to depreciate over the last decade against the U.S. dollar, largely due to persistently higher inflation in Colombia than in the U.S. In 2022, the currency plummeted due to political uncertainty over President Petro's reform agenda, before regaining some ground in 2023. For more info on the peso, click here.
Economic situation in Colombia
Our panel expects annual GDP growth to have edged up in Q4, but available data suggests downside risks to this forecast. A softer rise in agricultural output pushed annual economic activity growth down to 1.7% in October–November (Q3: +2.1% yoy), outweighing improved readings for industry and services. In addition, goods exports lost traction in Q4 relative to Q3. In fiscal news, the President approved the USD 126 billion 2025 budget by decree in late 2024, envisaging a fiscal deficit of 5.1% of GDP. The government will announce an around USD 3 billion spending freeze in the coming months, though a larger fiscal shortfall is likely as the budget hinges on 3.0% GDP growth for 2025, far above our Consensus. In geopolitics, the U.S. briefly threatened a 25% tariff on imports from Colombia in late January, highlighting the looming threat to trade revenues from spats with President Trump.Colombia Economic Forecasts
Projections out to 2034.55 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 51 expert analysts.
Want to get insight on the economic outlook for Colombia in the coming years? FocusEconomics collects projections out to 2034 on 55 economic indicators for Colombia from a panel of 51 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Colombia economy. To download a sample report on the Colombia's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
Colombia Economic Indicators
Q&A:
How is the economy in Colombia today?
Does Colombia have a strong economy?
What is Colombia's main economic sector?
Colombia's economy is facing several challenges. Economic growth is expected to slow in 2023 versus 2022. Inflation remains high, and the currency, the peso, has depreciated significantly. The economy is also vulnerable to external shocks, such as changes in global commodity prices and geopolitical tensions.
Colombia has a growing economy which is currently the fourth largest in Latin America. It's known for strength in oil, mining and agriculture. However, challenges such as social inequality, political instability, and an overreliance on commodity exports affect its economic strength.
Colombia's main economic sector is services, which accounts for over half of GDP and employs about 65% of the workforce. This sector includes a wide range of activities, such as retail, finance, tourism, and professional services. That said, the primary sector is also an important contributor to GDP.