Colombia Economy 2026 — Growth Returns but the Inflation Catch Stays
Colombia · Economy — Key Facts
September 2026 Update
This guide was first published in April 2026 and has been fully re-verified on 25 September 2026. Since then Colombia has changed president, the central bank has raised its policy rate to 12 percent, second-quarter growth came in at 3.5 percent, and August inflation re-accelerated to 6.24 percent. All figures below carry their as-of month; where official sources and forecasts diverge, we say so.
This article is updated when the data moves. The next fixed point is the Banco de la República rate decision on 30 September 2026.
Key Facts
1.Colombia’s GDP grew 3.5 percent year-on-year in the second quarter of 2026 (DANE, August), the strongest quarter of the recovery — driven largely by public spending
2.Inflation re-accelerated to 6.24 percent in August, the highest since July 2024 and more than double the 3 percent target. The central bank has held its policy rate at 12.0 percent since 1 July; the next decision is 30 September
3.Abelardo de la Espriella, a conservative outsider endorsed by Donald Trump, won the June runoff by about 252,000 votes and took office on 7 August 2026, ending the Petro era
4.The peso has strengthened roughly 14 percent over twelve months to about 3,358 per dollar (25 September 2026) — a gain fed by 12 percent interest rates that squeezes exporters
5.The fiscal deficit is the central vulnerability: the fiscal rule remains suspended, debt sits above 61 percent of GDP, and the new government must reconcile promised tax cuts with a consolidation need that ANIF prices at COP 30.2 trillion
How is Colombia’s economy doing in 2026? Growing faster than it has in years — and inflating well above target, with a brand-new government that has promised to cut the state by 40 percent while calming a bond market that still prices Colombia below investment grade. Both things are true at once, and this guide maps both.
Growth: the Best Quarter of the Recovery, with a Catch
Colombia’s economy grew 3.5 percent in the second quarter of 2026 compared with a year earlier, the statistics office DANE reported in August — a sharp acceleration from 1.9 percent in the same quarter of 2025 and from 2.2 percent in the first quarter of 2026. On a seasonally adjusted quarterly basis, growth reached 1.3 percent. After the 0.6 percent stall of 2023, the path has run 1.7 percent (2024), 2.6 percent (2025) and now a first half of 2026 near 2.8 percent.
The composition is the honest caveat. Public administration, defense and social security led the expansion at about 10 percent year-on-year, with arts and entertainment up 9.5 percent — growth pulled by government spending in an election year, not by private investment. Fedesarrollo’s June analyst survey puts full-year 2026 growth at 2.4 percent, implying a softer second half as the public-spending impulse fades and 12 percent interest rates bite. Our August report on the Q2 print details the sector split.
Inflation and the Central Bank: 12 Percent and Split
Inflation is moving the wrong way. Annual CPI reached 6.24 percent in August (DANE, 7 September), up from 6.03 percent in July and the highest reading since July 2024; the monthly print of 0.39 percent more than doubled July’s and missed the 0.27 percent analyst consensus. The drivers are indexation after a minimum-wage increase of more than 23 percent, rising rents and services, gasoline and utility prices — and, since 10 August, an earthquake in the Quindío coffee region whose supply disruptions Banco de Bogotá expects to push year-end inflation to 6.8 percent. The central bank’s own survey cluster sits around 6.5–6.6 percent for December.
Banco de la República has responded with a full reversal of its easing cycle: from 9.25 percent in late 2025 to 10.25 percent in January 2026, 11.25 percent in March, and 12.0 percent since 30 June — the last step a 75-basis-point hike whose minutes show a board split three ways (four for the hike, two for a 50-point cut, one for a hold). The 31 July hold passed four votes to three, with the minority wanting another half-point rise. The next decision lands on 30 September; the board is in its pre-meeting silence period as this update is published.
The institutional crisis that framed the spring — Finance Minister Germán Ávila walking out of the March board meeting, with Colombian law then preventing the board from convening in the minister’s absence — has receded. In late May the Council of State suspended the attendance requirement, and the election result removed the prospect of a prolonged executive–central-bank standoff, as BNP Paribas noted in July. The IMF continues to project inflation returning to the 3 percent target only in the course of 2027.
The New Government: de la Espriella’s Hundred Days
The dominant 2026 variable has resolved. Abelardo de la Espriella, a 47-year-old criminal lawyer and businessman with no prior office, won the 21 June runoff with 49.66 percent against Iván Cepeda’s 48.70 percent — an official margin of 251,854 votes after the recount, in the highest-turnout runoff since the mechanism exists. He took office on 7 August 2026. His vice president, José Manuel Restrepo, is a former finance minister under Iván Duque and the deliberate market-credibility anchor of the ticket.
The announced program is a break with the Petro years: a security shock plan modeled on El Salvador, a 40 percent cut in the state apparatus including 700,000 public-sector jobs (roughly 3 percent of total employment), the resumption of fracking and new oil exploration, and the elimination of levies including the financial-transactions tax. The economic counterweight is arithmetic: ANIF, the financial institutions’ research center, has told the incoming team that restoring the suspended fiscal rule requires consolidation worth COP 30.2 trillion (about US$8.8 billion). A tax reform billed as simplification and base-broadening was due to be formally presented in September 2026; whether it can pass a Congress where the president’s own movement holds four Senate seats is the governability question of the year.
For the Petro-era record this guide originally tracked: the labor reform passed in June 2025 after 27 months, the pension reform channeling contributions to Colpensiones stands, the health reform advanced by decree (Decree 0182 of 2026) after failing twice in the Senate, and the ELN peace process collapsed in January 2026. What changes under the new administration is direction, not yet law — every structural item requires Congress.
The Peso: Strong, and That Is Also a Problem
The Colombian peso traded at 3,358 per dollar on 25 September 2026 — about 14 percent stronger than a year ago, though it gave back roughly 7 percent over the past month. The August monthly average was 3,131 (OECD data via FRED), the strongest monthly average in years. The engine is the rate differential: 12 percent policy rates attract carry-trade inflows, and the central bank’s June minutes explicitly flag the risk that a strong peso plus high rates invites speculative capital that can reverse suddenly.
The two-sided effect is visible in the data: imports grew above 10 percent year-on-year through April, worsening the trade balance, while exporters and domestic manufacturers competing with Chinese goods lose ground. Forecasts diverge honestly — Fedesarrollo’s panel saw year-end around 3,650, while trading models point nearer 3,180; we present both rather than pick one. Remittances, up 8.1 percent to US$8.7 billion in 2025, remain the quiet stabilizer of the external accounts, and international reserves ended 2025 at US$66.4 billion, within the IMF’s adequacy range.
The Numbers at a Glance
| Indicator | Value | As of |
|---|---|---|
| GDP growth, Q2 2026 (DANE) | +3.5% year on year | August 2026 release |
| Inflation, annual (DANE) | 6.24% | August 2026 |
| Policy rate (BanRep) | 12.0% | Since 1 July 2026; next decision 30 September |
| Exchange rate (USD/COP) | 3,358 | 25 September 2026 |
| Unemployment (seasonally adjusted) | 8.1% | May 2026 (BanRep minutes) |
| Fiscal deficit, 2025 | 6.2% of GDP (post-suspension) | Finance ministry via Reuters |
| Public debt | >61% of GDP | 2026 projections |
| International reserves | US$66.4 billion | End-2025 (BanRep) |
Export Sectors: Coffee, Oil, Coal, Mining
Coffee delivered a historic 2024-25 crop of nearly 15 million 60-kilogram bags, the highest since 1996, with export values up 79.7 percent to US$3.67 billion in the first eight months of 2025 on record arabica prices; the USDA projects a 5.3 percent production correction for 2025-26, and the August earthquake struck the Quindío heartland of the coffee axis, with harvest damage still being assessed. Oil remains the largest single export earner (about US$15 billion in 2024); Ecopetrol reported proved reserves of 1.944 billion barrels at end-2025, a 2.7 percent increase, against production of roughly 763,000 barrels a day. The policy frame flips under de la Espriella, who campaigned on reopening exploration and fracking after Petro’s moratorium — execution runs through the same constrained Congress. Coal is in structural decline: exports fell 21.2 percent in volume and 31.8 percent in revenue in 2025. Mining beyond coal — gold, copper, nickel — holds the medium-term upside, with permitting uncertainty the binding constraint.
What Could Reverse It
Inflation expectations are unanchoring. Survey and market-based expectations sit near 6.5 percent for year-end against a 3 percent target; the BanRep minutes describe a credibility deterioration that forces rates to stay high even as growth depends on public spending.
The fiscal math does not close by itself. A suspended fiscal rule, debt above 61 percent of GDP, below-investment-grade ratings — and a president promising tax cuts and a smaller state at once. If the September tax reform stalls in Congress, sovereign repricing is the market’s default answer.
Governability is unproven. A 0.96-point mandate, four own Senate seats, and a thin-skinned outsider style: coalition failure would freeze the entire economic agenda.
Security has not turned. The ELN process collapsed in January 2026 with over a hundred killed and some 55,000 displaced in the northeast; violence in Chocó, Cauca, Nariño and Arauca keeps disrupting mining and energy operations.
The strong peso cuts both ways. Carry-trade inflows at 12 percent can reverse fast, as BanRep’s own minutes warn — the same flows that cheapen imports today can amplify a depreciation tomorrow.
What We Could Not Confirm
Third-quarter GDP had not been published at the time of writing, and the September inflation print is due from DANE in early October. We could not verify whether the promised tax reform had formally been presented to Congress by 25 September 2026 — announcements pointed to September, but we found no bill text. The year-end inflation forecasts we cite (6.5–6.8 percent) are bank and survey projections, not official BanRep numbers. Damage assessments from the 10 August earthquake in the coffee region were still preliminary. Where a figure could not be dated and sourced, we left it out.
More: Colombia news in English, every day from The Rio Times.
Related Reading
Colombia — all coverage and the country hub
Colombia Explained 2026: The Country, Its Politics, Its Economy and What to Watch — our new country pillar
Colombia Economy Grew 3.5% in the Second Quarter, Led by Public Spending — August 2026
Colombia Inflation Accelerates to 6.24 Percent in August — September 2026
Latin America — regional economy coverage
Sources
DANE (Q2 2026 GDP release, August 2026; August CPI, 7 September 2026); Banco de la República — policy rate page checked 25 September 2026 (12.0% since 1 July, next decision 30 September), June 2026 board minutes, July Monetary Policy Report; AP, “Trump-endorsed Abelardo de la Espriella declared winner of Colombia’s presidential runoff election”, 24 June 2026; Colombia’s National Electoral Council official canvass, 25 June 2026; BNP Paribas Economic Research, “Colombia: A programme of radical change”, 20 July 2026; Economics Observatory, “What can Colombia expect after the 2026 presidential election?”, 4 August 2026; Banco de Bogotá inflation forecast via Bloomberg Línea, 24 August 2026; Fedesarrollo financial opinion survey, June 2026; OECD/FRED monthly exchange rate (August 2026 average); TradingEconomics USD/COP quote, 25 September 2026; Ecopetrol proved-reserves release (end-2025); USDA coffee projections; ANIF consolidation estimate as reported. The Rio Times reporting on Colombia’s GDP, inflation and the peso, August–September 2026. Figures verified on 25 September 2026 and stated with their as-of month; where forecasts diverge, both are shown.
This article is part of The Rio Times’ Country Guide series. First published 6 April 2026; last updated 25 September 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
Frequently Asked Questions
How is Colombia’s economy doing in 2026?
Growing at its fastest pace in years — 3.5 percent in the second quarter — while inflation re-accelerates (6.24 percent in August) and the central bank holds a 12 percent policy rate. A new president, Abelardo de la Espriella, took office on 7 August 2026 with a market-friendly program whose fiscal math is unproven.
What is Colombia’s inflation rate right now?
6.24 percent annual inflation in August 2026 (DANE), the highest since July 2024 and above the 3 percent target. Bank forecasts for year-end cluster between 6.5 and 6.8 percent, partly on earthquake-related supply disruptions.
What is Colombia’s central bank rate in 2026?
12.0 percent, in effect since 1 July 2026 after a 75-basis-point June hike, and held in a split 4-3 July decision. The next rate decision is scheduled for 30 September 2026.
Who won Colombia’s 2026 presidential election?
Abelardo de la Espriella, a conservative lawyer and political outsider endorsed by Donald Trump, won the 21 June runoff with 49.66 percent against Iván Cepeda’s 48.70 percent — a margin of 251,854 votes. He took office on 7 August 2026, with former finance minister José Manuel Restrepo as vice president.
Why is the Colombian peso so strong in 2026?
Twelve-percent interest rates attract carry-trade capital, and election uncertainty eased after June. The peso near 3,358 per dollar (25 September) is about 14 percent stronger than a year ago — good for import prices, hard on exporters, and vulnerable to reversal, as the central bank itself warns.
How big is Colombia’s fiscal problem?
The 2025 deficit reached 6.2 percent of GDP after the fiscal rule was suspended, debt exceeds 61 percent of GDP, and ratings sit below investment grade. ANIF estimates COP 30.2 trillion (about US$8.8 billion) in consolidation is needed to restore the rule — while the new government simultaneously promises tax cuts.
What are Colombia’s main exports in 2026?
Oil leads (about US$15 billion in 2024), followed by coffee after a record harvest, with coal in structural decline and gold and copper mining as the medium-term growth bet. Tourism and remittances (US$8.7 billion in 2025) anchor services and external accounts.