Colombia in 2025: Remittances Surge, the Peso Strengthens, and Debt Stays in Focus

Key Points

• Growth improved into mid-year, but inflation stayed above 5% and kept rate cuts on a short leash.
• A stronger peso and record-bound remittances steadied confidence, even as oil prices softened.
• Debt ratios looked contained, yet the state leaned harder on refinancing tactics as the fiscal gap widened.

Uncertainty and caution defined Colombia’s economy in 2025. Forecasts missed more often than usual, not because the data were unavailable, but because the country kept switching speeds: a recovering GDP, a stubborn inflation rate, and an external sector buoyed by money arriving from abroad.

After 2024’s “reactivation” year, the government aimed to lock in a stronger expansion. The economy delivered steady quarterly growth: 2.6% in the first quarter, 2.1% in the second, and 3.6% in the third, the best since mid-2022.

Many analysts looked for full-year growth around 2.7%–2.8%, driven mainly by household consumption. The improvement was real, but it arrived with an awkward companion: prices would not cooperate.

Inflation refused to glide back toward the central bank’s 3% target. It opened the year at 5.22%, dipped to 4.82% in June, then climbed again—5.10% in August, 5.18% in September, 5.51% in October—before easing to 5.30% in November.

Forecasters who once expected a 2025 finish near 4% had to reset. Citi’s year-end call sat near 5.2%, and Corficolombiana projected 4.5% for 2026—still above target.

That stickiness shaped monetary policy. Banco de la República began 2025 at 9.50%, cut once in April by 25 basis points to 9.25%, and then held steady the rest of the year.

Corficolombiana warned that 2026 could bring at least 50 basis points of hikes, a sign the easing cycle may not be a one-way street.

The labor market improved on the headline numbers. Unemployment fell from 11.6% in January to 8.2% by October, the lowest since 2017, with 977,000 more people employed than a year earlier.

Participation rose to 65.0% and the employment rate to 59.7%. Yet business leaders kept pointing to a familiar caveat: informality remained heavy, leaving millions without full benefits or protections.

Externally, two forces pulled sentiment in opposite directions. Brent crude was volatile and softer than expected, sliding from $72.98 (Dec. 18, 2024) to $59.71 (Dec. 18, 2025), amid global tensions, U.S. tariff policy, and Middle East risks.

Analysts increasingly discussed 2026 oil scenarios in the $55–$60 range. Meanwhile, the peso surprised on the upside. The TRM moved from COP 4,379.71 per dollar (Dec. 10, 2024) to COP 3,874.71 (Dec. 19, 2025), with periods near COP 3,700.

Explanations ranged from Fed rate cuts to stronger coffee exports, rising remittances, and government monetization of resources held abroad—plus a pre-election backdrop that can amplify positioning.

Remittances became the clearest stabilizer. Monthly inflows stayed above $1.0 billion all year, peaking at $1.158 billion in July. By October, Colombia had received $10.854 billion, making a full-year total above $12 billion look likely.

The trend supports consumption and the currency, but it also reflects a deeper shift: sustained emigration, including estimates that more than 1.5 million people left over three years seeking work and stability abroad.

Debt management rounded out the year’s tightrope. External debt reached $211.584 billion in September 2025—$118.135 billion public and $93.450 billion private—around 48.6% of GDP, within a narrow 47%–49% band.

Officials emphasized buybacks and curve management to handle maturities, even as the fiscal deficit was projected near 6.2%. It eased today’s pressure, but it also left a louder question for 2026: how long can confidence stay ahead of the math?

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error