Private Consumption in Colombia
The Colombian economy recorded an average private consumption growth rate of 4.2% in the decade to 2022, above the 1.8% average for Latin America. In 2022, private consumption growth was 9.5%. For more private consumption information, visit our dedicated page.
Colombia Private consumption Chart
Note: This chart displays Private Consumption (annual variation in %) for Colombia from 2020 to 2017.
Source: Macrobond.
Colombia Private consumption Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Private Consumption (ann. var. %) | 4.1 | -5.0 | 14.7 | 10.7 | 0.8 |
GDP growth ebbs in the third quarter
Economic expansion disappoints markets: The economy lost momentum in the third quarter, with annual GDP growth moderating to 2.0% from 2.1% in Q2. The reading fell short of both the Central Bank’s projections and market expectations. On a seasonally adjusted quarter-on-quarter basis, economic growth edged down to 0.2% in Q3 from the previous period's 0.5% increase, marking the slowest rise since Q4 2023.
Government spending and net trade deteriorate: Domestically, government spending was the main drag on GDP growth, swinging into a 4.3% contraction (Q2: +4.8% yoy); public coffers were strained in Q3 as the government was forced to pause a proposed diesel price hike. In addition, fixed investment growth moderated to 4.0% in Q3 from Q2’s 4.3%. More positively, private consumption sped up to 1.6% year on year in the third quarter (Q2: +1.2% yoy), which marked the best reading since Q1 2023; higher real wage growth and a tighter labor market supported household purchasing power. On the external front, exports of goods and services growth waned to 3.8% in Q3 (Q2: +5.6% yoy). Conversely, imports of goods and services growth picked up to 11.0% in Q3 (Q2: +3.0% yoy), marking the best reading since Q3 2022. Overall, net trade detracted from the headline reading.
GDP growth to accelerate in 2025, but downside risks loom: Our panel expects the economy to be expanding at a broadly similar pace to Q3 in Q4: A further deceleration in exports is forecast to be offset by a slower fall in public spending and faster increases in private spending and fixed investment. Economic growth will then rise steadily through Q4 2025, fueled by interest rate cuts and lower inflation. As a result, our Consensus is for the economy to accelerate to around its past-decade average of 2.8% in 2025 as a whole. That said, risks are tilted heavily to the downside and include a looming energy crisis—as a result of underinvestment in the hydrocarbons sector, disruptions to hydroelectric output and a recent resurgence in rebel attacks on the oil sector—a rising fiscal shortfall and social unrest.
Panelist insight: Goldman Sachs’ Santiago Tellez commented: “We continue to expect positive but below-trend real growth in upcoming quarters—bolstered by resilient household demand and slowly recovering machinery & equipment but dragged by still-soft housing investment, which remains the main downside risk to our growth forecast. Policy uncertainty will continue to bear on growth. These headwinds will be partially mitigated by robust workers’ remittances in local currency, further disinflation gains, and the progressive normalization of the policy stance.” Analysts at Itaú Unibanco said: “Activity has shown signs of gradually recovering, although at an uneven pace across sectors. We expect the economy to grow 2.0% this year (0.6% in 2023), where the lagged effect of a monetary policy that continues to be contractionary and a gradual disinflationary process will restrict a more significant rebound in activity.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Colombian private consumption projections for the next ten years from a panel of 30 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. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Colombian private consumption.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Colombian private consumption projections.
Want to get access to the full dataset of Colombian private consumption forecasts? Send an email to info@focus-economics.com.
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