Colombia’s Debt Hits 65% of GDP as Borrowing Costs Soar

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.

This is part of The Rio Times’ daily coverage of Colombia news and Latin American financial news.

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.

Read More from The Rio Times

• USA & Canada Intelligence Brief for Monday, April 6, 2026
• Europe Intelligence Brief for Monday, April 6, 2026
• Cuba Exile Leadership Battle Heats Up as Transition Hopes Rise