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Colombia Economic Forecast

Colombia Economic Outlook

The economy weakened more than expected in Q2, nearly stagnating year on year and contracting quarter on quarter. The deceleration in year-on-year GDP growth was caused by slowing exports and private spending plus a sharper fall in fixed investment. Activity was likely knocked by the highest interest rates since the 1990s; banks issued less monthly credit to consumers in April and May than in Q1 on average. Heading into Q3, the economy is expected to gather steam but remain weak. Inflation and interest rates remain high, contributing to a sharper fall in manufacturing activity in July–August than in Q2. In other news, the President said he would seek to renegotiate a trade agreement with the U.S., which he stated was hurting agricultural output and employment. Shortly afterward, the CEA—a trade group representing U.S. firms—said the remarks could deter U.S. investment in Colombia.

Colombia Inflation

Inflation eased to 11.4% in August from 11.8% in July. It should continue to cool ahead as domestic demand weakens and the base effect toughens. That said, inflation is seen remaining above the Central Bank’s 2.0–4.0% target even at the end of 2024. Key factors to watch include commodity prices, fiscal stimulus and the strength of the peso.

This chart displays Economic Growth (GDP, annual variation in %) for Colombia from 2013 to 2022.

Colombia Economic Data

2018 2019 2020 2021 2022
Population (million) 48.3 49.4 50.4 51.0 51.6
GDP (USD bn) 334 323 270 319 344
GDP per capita (USD) 6,924 6,541 5,363 6,241 6,659
GDP (COP tn) 988 1,060 998 1,193 1,463
Economic Growth (Nominal GDP, ann. var. %) 7.3 7.3 -5.9 19.5 22.6
Economic Growth (GDP, ann. var. %) 2.6 3.2 -7.3 11.0 7.3
Domestic Demand (ann. var. %) 3.5 4.0 -7.6 13.4 9.4
Total Consumption (ann. var. %) 4.0 4.3 -4.1 13.6 7.8
Private Consumption (ann. var. %) 3.2 4.1 -4.9 14.5 9.5
Government Consumption (ann. var. %) 7.4 5.3 -0.8 9.8 0.3
Fixed Investment (ann. var. %) 1.0 2.2 -24.0 17.3 11.4
Exports (G&S, ann. var. %) 0.6 3.1 -22.7 15.9 14.8
Imports (G&S, ann. var. %) 5.8 7.3 -19.9 26.7 22.3
Manufacturing Production (ann. var. %) 2.9 1.5 -8.1 16.2 10.7
Retail Sales (ann. var. %) 5.4 8.1 -1.6 12.1 9.0
Unemployment (% of active population, aop) 10.0 10.9 16.7 13.8 11.2
Fiscal Balance (% of GDP) -3.1 -2.5 -7.8 -7.0 -5.3
Public Debt (% of GDP) 49.3 50.3 65.1 63.0 61.1
Money (ann. var. of M2 %) 5.0 8.7 14.3 11.8 12.1
Inflation (CPI, ann. var. %, eop) 3.2 3.8 1.6 5.6 13.1
Inflation (CPI, ann. var. %, aop) 3.2 3.5 2.5 3.5 10.2
Inflation (Core, ann. var. %, eop) 3.2 3.8 1.9 4.4 11.6
Policy Interest Rate (%, eop) 4.25 4.25 1.75 3.00 12.00
90-day DTF (%, eop) 4.54 4.48 1.89 3.21 13.70
10-Year Bond Yield (%, eop) 7.02 6.42 5.76 8.46 13.23
Stock Market (ann. var. of MSCI IMI %) -7.9 33.9 -13.9 2.3 4.5
Exchange Rate (COP per USD, eop) 3,250 3,277 3,433 3,981 4,810
Exchange Rate (COP per USD, aop) 2,956 3,281 3,693 3,743 4,255
Current Account Balance (USD bn) -14.0 -14.8 -9.3 -18.0 -21.5
Current Account Balance (% of GDP) -4.2 -4.6 -3.4 -5.6 -6.3
Merchandise Trade Balance (USD bn) -6.4 -9.9 -8.9 -14.0 -12.0
Merchandise Exports (USD bn) 43.0 40.7 32.3 42.7 59.6
Merchandise Imports (USD bn) 49.4 50.5 41.2 56.7 71.7
Merchandise Exports (ann. var. %) 8.1 -5.4 -20.5 32.3 39.5
Merchandise Imports (ann. var. %) 12.1 2.3 -18.5 37.7 26.3
Foreign Direct Investment (USD bn) 11.3 14.0 7.5 9.4 17.0
International Reserves (USD bn) 48.4 53.2 59.0 58.6 57.3
International Reserves (months of imports) 11.8 12.6 17.2 12.4 9.6
External Debt (USD bn) 132 139 155 171 184
External Debt (% of GDP) 39.6 42.9 57.2 53.8 53.5

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