Colombia: Economic growth picks up in the first quarter of 2026
GDP growth exceeds market estimates: Colombia’s GDP grew 2.2% in annual terms in Q1, following a 2.1% expansion in the previous quarter and overshooting market expectations.On a seasonally adjusted quarter-on-quarter basis, GDP expanded 0.6% in Q1, following a flat reading in the prior quarter.
Private spending spearheads GDP growth: Relative to the prior quarter’s data, readings in Q1 improved for private consumption (+2.7% in annual terms vs +2.3% in Q4), fixed investment (+3.7% vs -2.0% in Q4) and imports of goods and services (+3.5% vs +2.9% in Q4). In contrast, readings softened for government consumption (+7.8% vs +9.2% in Q4) and exports of goods and services (+3.5% vs +3.7% in Q4).
Private spending was the main driver of growth in Q1, thanks to an unprecedented 22.7% minimum wage increase effective from 1 January. On the other hand, the external sector weighed on GDP growth as a result of higher global trade protectionism.
GDP growth to rise, but risks loom: The economy is expected to grow at a stronger pace in Q2. That said, downside risks loom. Higher price pressures due to the U.S.-Iran war and elevated interest rates are likely to depress domestic activity. Moreover, social unrest related to May’s presidential election could sour investor sentiment and weigh on domestic consumption.
Panelist insight: Commenting on the outlook, BBVA’s Alejandro Reyes González stated:
“The observed trend in the variables is in line with expectations, except for the behavior of external demand (which was more dynamic than anticipated, in both exports and imports) and especially the behavior of inventory changes. This is a highly volatile variable, but it points to a downward bias for GDP performance this year, even though the dynamics of domestic spending remain favorable. With this in mind, we believe there is a downside bias to our growth forecast for the year.”