Colombia: Staff Statement

IMF News, April 18, 2025

Source details

Staff team engaged with Colombian authorities during the ongoing 2025 Article IV consultation, with visits to Bogotá in mid-February and early-April.
Ms. Oner and Mr. Ding issued the statement on April 18, 2025.

The economy expanded by 1.7 percent in 2024 after slowing sharply in 2023, supported by private consumption reflecting a robust labor market and gradual recovery in investment.
Headline inflation resumed its downward trend in March, reaching 5.1 percent (y/y), underpinned by appropriately tight monetary policy.
Current account deficit narrowed to 1.8 percent of GDP in 2024, supported by strong tourism and remittances inflows.
Net foreign direct investment financed the deficit despite net portfolio outflows.

International reserves rose to 130 percent of ARA by end-March, supported by the authorities’ reserve accumulation program last year.

The banking system remains sound—liquid, adequately capitalized and provisioned—and subject to strong oversight.

Central government overall fiscal deficit rose to 6.7 percent of GDP in 2024, up from 4.2 percent of GDP in 2023.
The 2024 deficit was 1.1 percentage points of GDP above the authorities’ deficit target in the medium-term fiscal framework.
Higher deficit drivers:
- Lower-than-projected tax revenues.
- Higher than targeted primary expenditures, despite spending adjustments in late-2024.
Budgetary backlogs accumulated due to liquidity constraints amount to 2.8 percent of GDP; these are being cleared in 2025 and compete with 2025 budgetary resources.
Gross public debt reached 61.3 percent at end-2024.
Colombian spreads have risen, especially relative to peers, also impacted by tighter global financial conditions and a somewhat weaker peso.

Staff is engaging with authorities on implications of rising global trade tensions on the Colombian outlook, including knock-on effects through the commodity price channel and the financial and trade channels.
Engagement focuses on better understanding the authorities’ policy response to the new environment.
Staff emphasizes decisively strengthening public finances to mitigate shocks in an environment of elevated and shifting global risks.

The 2025 Financing Plan published in February envisages an improvement in the central government deficit to 5.1 percent of GDP.
Authorities are working on:
- Policies underpinning the projected revenue gains.
- Necessary expenditure adjustments to meet the overall fiscal deficit target and bolster resilience.

The Article IV consultation will continue in the period ahead.
Staff thanks the authorities for open and constructive dialogue and looks forward to maintaining close engagement, including in the margins of the IMF-World Bank Spring Meetings in late-April in Washington, DC.

Source: IMF staff statement, April 18, 2025.