Colombia’s Debt: Growth Slows as Borrowing Accelerates

Colombia’s external debt reached US$207.8 billion in April 2025, representing 49.2% of the country’s GDP, according to the central bank. This marks a significant increase from US$203.3 billion in March 2025.

The public sector led this rise, with public external debt jumping from US$112.99 billion to US$116.91 billion in just one month. Private sector debt also grew, though at a slower pace, from US$90.30 billion to US$90.92 billion.

The debt-to-GDP ratio remains the key figure to watch. It measures how much the country owes compared to what it produces. When this ratio falls, the economy is growing faster than its debt.

Colombia’s debt-to-GDP ratio dropped from 57.7% in May 2021 to 49.2% in April 2025, marking the first sustained period below 50% since July 2020. This long-term decline had signaled that economic growth was outpacing borrowing.

Recent Debt Trajectory

However, the latest data reveal a sharp monthly acceleration in debt. The total external debt grew by over US$4.5 billion in April alone, the largest monthly jump in the past year.

Both public and private debt as a share of GDP inched up, but the public sector’s increase was more pronounced.

Context and Regional Comparison

While Colombia’s debt-to-GDP ratio remains below the 50% threshold—a level often seen as a warning sign for emerging markets—the pace of debt accumulation has accelerated under President Gustavo Petro.

This shift raises concerns about fiscal discipline and sustainability, especially as public borrowing surges. For comparison, Brazil’s debt-to-GDP ratio is nearly 80% and could reach 92% in the coming years, according to S&P Global.

Colombia’s ratio is still much lower, but the recent trajectory, if sustained, could erode this advantage.

Implications

• A rising debt-to-GDP ratio can undermine investor confidence and increase borrowing costs.
• The sharp rise in April 2025 signals that Colombia’s fiscal position is deteriorating more rapidly, especially as public sector borrowing accelerates.
• If this trend continues, Colombia risks breaching the 50% threshold, which could trigger negative reactions from credit agencies and financial markets.

Conclusion

Colombia’s external debt remains below the critical line, but the latest figures point to a troubling acceleration in borrowing under the current administration.

The country’s ability to keep its debt burden in check now depends on restoring fiscal discipline and ensuring that economic growth continues to outpace debt accumulation.

The numbers show that vigilance and prudent management are needed to prevent Colombia from slipping into a more precarious financial position.