Video Transcription
Effective macroeconomic policies helped Colombia successfully navigate the pandemic-induced recession and stabilised the economy.
But after a strong post-pandemic rebound, Colombia’s economic activity has slowed.
Economic growth is projected at 1.8% in 2024, reflecting the lingering impacts of tight macroeconomic policies and slowing global growth.
An acceleration of GDP growth to 2.8% is expected for 2025, reflecting a return to a low growth potential.
Comprehensive reforms would help Colombia sustain growth over the long term while improving equality of opportuniteis and social cohesion.
Colombia has cut its public debt to 57% of GDP, but public debt financing costs have increased.
Continue fiscal consolidation and comply with the fiscal rule to help reduce public debt financing costs, supporting debt sustainability.
Tax revenues are well below most other Latin American countries.
Implementing a comprehensive, gradual, and well-communicated tax reform would fund essential social and productive investments.
Fostering an investment-friendly environment would boost growth and raise living standards for all.
To stimulate private investment:
- Lessen regulatory compliance costs
- Facilitate access to affordable credit
- Foster a stable and predictable policy environment
Colombia has large regional economic disparities. Closing these gaps between regions would bring greater prosperity.
To reduce regional economic disparities:
- Develop interconnected road, rail, sea and river transport
- Strengthen fiscal and administrative capacities of subnational governments
- Improve fairness in the fiscal transfer system
Colombia has high informality, low access to quality education, and gender gaps in the labour market.
To promote equality:
- Reduce social security contributions for low-income workers
- Improve skills
- Increase the coverage of child and elderly care services
Colombia has rich natural resources and high potential for renewable energy, but challenges remain to achieving net zero by 2050.
To reduce greenhouse emissions:
- Combat deforestation by strengthening law enforcement
- Accelerate investment in renewable energy by establishing stable regulations and increasing the carbon tax rate
To learn more, read our Economic Survey of Colombia 2024.