Key Points
A government that cannot stop borrowing and a market that is charging more to lend — that is the fiscal trap closing around Colombia as President Gustavo Petro enters his final months in office.
The Numbers
Colombia’s gross government debt reached 1,206 trillion pesos ($290 billion) in January, according to Finance Ministry data, equivalent to 65% of GDP. That is a nine-percentage-point jump from 56% in January 2025, when the debt stood at 1,031 trillion pesos ($248 billion). The acceleration has been particularly sharp since August, when the ratio was still at 60% — meaning five percentage points were added in just five months.
Internal debt accounts for 841 trillion pesos ($202 billion), mostly in government bonds known as TES. External debt stands at 364.8 trillion pesos ($88 billion). The total grew 16.9% year-on-year.
Why Borrowing Keeps Getting More Expensive
What makes the trajectory alarming is not just the size of the debt but what it costs to service it. Colombian 10-year bond yields now sit above 13%, having risen 4.3 percentage points over the past decade. That makes Colombia the second OECD country with the sharpest increase in borrowing costs, behind only Russia at 5.5 points — and ahead of the United States at 2.8 and Brazil at 2.6.
Diego Montañez-Herrera, an economist at Universidad Eafit, told La República that the speed matters more than the level. The debt jumped nine points of GDP in a single year, and with 10-year rates above 13%, stabilizing it will require either a primary surplus or significantly stronger growth — neither of which is on the horizon.
A Record Debt Wall
The government faces a peak of over 130 trillion pesos ($31 billion) in debt service payments this year, with heavy maturities concentrated through 2033. The Autonomous Committee of the Fiscal Rule has drawn a red line at 71% of GDP, warning that crossing it could trigger a loss of investor confidence and even higher borrowing costs — a self-reinforcing spiral.
The Petro administration suspended Colombia’s fiscal rule for 2025, allowing the deficit target to rise to over 7% of GDP. Congress rejected a tax reform bill worth 16.3 trillion pesos ($3.9 billion) that was supposed to close the revenue gap. Rating agencies have responded: Fitch holds Colombia at BB+ and projects debt reaching 63% of GDP by year-end, while Standard & Poor’s has assigned a BB rating with a negative outlook.
Growth Cannot Keep Up
Colombia’s economy grew 2.6% in 2025, with the fourth quarter posting 2.3%. Respectable numbers, but not enough to outrun a debt growing faster than the economy that must service it.
Whoever wins Colombia’s presidential election this year inherits a government that spends more than it collects, borrows at some of the highest rates in the OECD, and faces a wall of maturities that leaves almost no room for new priorities. The fiscal math does not wait for inaugurations.