IMF Executive Board Concludes 2025 Article IV Consultation with Colombia
IMF News, September 30, 2025
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- Published: September 30, 2025
Macroeconomic outlook and projections
- Growth is projected to reach around 2½ percent in 2025 and moderate somewhat over the coming years.
- IMF staff projections (selected):
- Real GDP: 2023: 0.7; 2024: 1.6; 2025: 2.3; 2026: 2.7; 2027: 2.9; 2028: 2.8.
- Potential GDP growth: 2.4 (2023); 2.6 (2024).
- Output Gap (percent): 0.5 (2023); -0.4 (2024); -0.3 (2025); -0.5 (2026); -0.2 (2027); 0.0 (2028).
- Consumer prices (average): 11.7 (2023); 6.6 (2024); 3.4 (2025).
- Consumer prices, end of period (eop): 9.3 (2023); 5.2 (2024); 4.4 (2025); 3.1 (2027).
- GDP deflator: 7.0 (2023); 6.0 (2024); 4.9 (2025); 3.5 (2026); 3.0 (2027).
- Current account (in percent of GDP): -2.3 (2023); -1.7 (2024); -2.6 (2025); -2.8 (2026); -3.0 (2027); -3.3 (2028).
- Gross international reserves (USD billion): 59.1 (2023); 62.7 (2024); 63.7 (2025); 64.6 (2026); 65.4 (2027).
- Public sector gross debt: 55.5 (2023); 61.2 (2024); 58.6 (2025); 61.4 (2026); 62.3 (2027); 61.6 (2028); 60.6 (2029); 59.5 (2030).
- Public sector external debt: 59.2 (2023); 53.3 (2024); 52.9 (2025); 52.1 (2026); 51.5 (2027).
- Gross domestic investment (in percent of GDP): 16.4 (2023); 16.8 (2024); 17.1 (2025); 17.4 (2026); 17.8 (2027); 18.2 (2028); 18.8 (2029); 19.3 (2030).
- Inflation expectations and timing:
- Inflation is expected to ease gradually to about 4½ percent by end-2025 and reach the 3 percent target by early 2027 (conditional on tight monetary policy and the resumption of fiscal restraint).
- Table entries show consumer prices (average) falling to 3.4 in 2025 and end-period inflation at 4.4 in 2025.
Fiscal position and public debt
- The government invoked the escape clause to suspend the fiscal rule through 2027.
- Fiscal dynamics and risks:
- Widening fiscal deficit and rising debt levels have led to elevated sovereign spreads and weak private investment amid policy uncertainties.
- Returning to the fiscal rule by 2028 will require substantial consolidation efforts.
- If consolidation proceeds as assumed, Directors judged Colombia’s gross public debt would remain sustainable over the medium term.
- Fiscal balances (in percent of GDP) — selected:
- Central government (CG) balance: -4.2 (2023); -6.7 (2024); -7.1 (2025); -4.8 (2026); -3.2 (2027).
- Central government structural balance 2/: -6.8 (2023); -6.0 (2024); -4.6 (2025); -2.7 (2026).
- Consolidated public sector (CPS) balance 3/: -5.9 (2023); -6.5 (2024); -5.3 (2025); -3.7 (2026); -2.0 (2027); -1.8 (2028).
- CPS non-oil structural primary balance: -1.1 (2023); -1.9 (2024); 0.6 (2025).
- CPS fiscal impulse (excluding Social Security) 4/: -2.2 (2023); -1.3 (2024); -1.5 (2025); -0.1 (2026); 0.2 (2027).
Monetary policy, reserves, and exchange rate
- Monetary policy stance:
- IMF Directors commended the central bank’s tight monetary policy stance, which has supported reducing inflation.
- Maintaining a tight monetary policy stance remains important to address persistent inflation pressures and upside risks; normalization should proceed cautiously and remain data-dependent.
- Reserves and exchange-rate framework:
- International reserves remain adequate and continue to be strengthened, reaching 131 percent of the ARA metric by end-June 2025.
- Gross international reserves (USD billion) series in the staff table: 59.1 (2023); 62.7 (2024); 63.7 (2025).
- Directors agreed that Colombia’s flexible exchange rate regime should continue to play its role as a shock absorber and that foreign exchange intervention should remain limited to episodes of disorderly market conditions.
- Emphasis on safeguarding central bank independence.
Financial sector and structural issues
- Financial sector resilience:
- Directors agreed the financial sector remains broadly resilient but highlighted the need for continued monitoring amid still-elevated real interest rates, rising sovereign exposures, and close bank–nonbank linkages.
- Encouraged continued progress in implementing the 2022 FSAP recommendations.
- Pension fund governance:
- Stress on establishing a sound governance framework and prudent investment principles for the new public pension savings fund.
- Long-term growth reforms:
- Directors recommended reforms to raise productivity, boost labor force participation, and diversify the economy.
- Noted the authorities’ ambitious energy transition plan and emphasized a well-designed and carefully phased transition to support sustainability and safeguard macroeconomic stability.
- Encouraged strengthening governance and transparency to enhance the investment climate.
Risks and downside scenarios
- External risks:
- Tighter global financial conditions, rising trade barriers, stricter immigration policies, and heightened geopolitical tensions could dampen growth, disrupt exports, FDI, and supply chains, reduce remittances, and raise borrowing costs.
- Domestic risks:
- Further delays in fiscal consolidation could raise concerns about unanchored fiscal policy, undermine investor confidence, and potentially trigger a sudden stop in capital inflows.
- Rising political uncertainties and intensification of violent crime and insecurity could weigh on economic activity and private sector development.
- Executive Board view on policy credibility:
- Directors underscored the importance of implementing the authorities’ fiscal consolidation plan and maintaining agile policymaking to safeguard macroeconomic stability.
- They noted the fiscal policy and policy framework have weakened since the 2024 FCL request and that restoring credibility is essential to re-anchor expectations and lower borrowing costs.
Key social and demographic indicators (selected)
- Population (million), 2024: 51.6.
- Per capita (US$), GDP 2024: 8,120.
- Gini coefficient (national), 2024: 0.55.
- Poverty rate (national), 2024: 31.8.
- Unemployment rate, Dec. 2024 (NSA, percent): 10.2.
- Life expectancy at birth (years), 2023: 77.7.
Source: IMF Executive Board Concludes 2025 Article IV Consultation with Colombia (Press Release No. 25/320), September 29, 2025.