IMF Staff Completes Article IV Mission to Colombia

IMF News, August 1, 2025

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An IMF staff team concluded its visit to Bogotá following a series of constructive discussions with the Colombian authorities on recent economic developments, outlook, risks, and policy priorities.
This engagement follows visits earlier in the year and ongoing discussions with the authorities.
End-of-Mission press releases convey preliminary findings after a visit; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Staff will prepare a report for the IMF's Executive Board, subject to management approval.

Real GDP expanded by 1.7 percent in 2024.
Real GDP grew by 2.7 percent in Q1:2025, driven by private consumption amid a robust labor market and a strong services sector.
Headline inflation declined to 4.8 percent (yoy) in June, supported by appropriately tight monetary policy, while underlying inflation pressures persist.
The current account deficit narrowed to 1.7 percent of GDP last year, driven by strong remittances but also sharply lower dividend payments and lagging investment.
International reserves have been further strengthened and remain adequate.
The financial system remains sound and resilient.

Central government overall fiscal deficit rose to 6.7 percent of GDP in 2024, up from 4.2 percent of GDP in 2023.
Gross public debt has risen to 61.2 percent of GDP by end-2024.
Authorities made use of the escape clause of the fiscal rule to recalibrate the fiscal path for 2025-27 in the most recent Medium Term Fiscal Framework (MTFF).
The draft budget for 2026 targets:
- an overall deficit of 6.2 percent of GDP, in line with the MTFF, and
- a primary deficit of 2 percent of GDP (up from 1.4 percent of GDP in the MTFF),
- to be financed mostly by a tax reform proposal.

Real GDP growth is projected to reach around 2½ percent this year, supported in part by some easing of fiscal policy, before converging to potential over the medium term.
Inflation is expected to continue declining and reach the 3 percent target by early 2027, contingent on the continued implementation of prudent monetary policy.
The current account deficit is projected to widen somewhat this year (to about 2½ percent of GDP), due in part to weaker terms of trade and higher fiscal deficits.
Fiscal deficits are now expected to reach 7.1 percent of GDP by end-2025 before declining, assuming steady implementation of policies consistent with the authorities’ budget and medium-term fiscal plan.

Risks to the outlook remain tilted to the downside:
- Heightened global uncertainty and geopolitical tensions could weigh on growth through both real and financial channels.
- Stricter immigration policies in host countries could negatively impact remittances.
- Domestic uncertainty around implementation of policies and reforms could further hold back investment.
Policy priorities and recommendations implied by staff findings:
- Sustain medium-term fiscal consolidation efforts as envisaged in the MTFF.
- Implement the draft 2026 budget and associated tax reform proposal to finance the targeted deficits.
- Continue appropriately tight/prudent monetary policy to bring inflation to the 3 percent target by early 2027.
- Maintain measures to strengthen international reserves and preserve financial system resilience.

Source: IMF Communications Department, "IMF Staff Completes Article IV Mission to Colombia", August 1, 2025.