Colombia’s Economic Growth Slows in Early 2025 as Industry and Agriculture Contract

Colombia’s official statistics agency, DANE, reported that the country’s leading economic indicator rose 1.77% year-on-year in February 2025. This marks a slowdown from the 2.65% increase in January and falls short of the 2.23% growth seen in February 2024.

The data, sourced directly from DANE, reveal that the economy’s momentum has eased, with the slowdown rooted in contractions across key productive sectors. Manufacturing output shrank by 3.12% in February, a sharp reversal from the slight growth seen the previous month.

Primary industries, which include agriculture and mining, contracted by 0.96%, deepening their decline from January. The services sector, which had previously driven growth, expanded by 3.54% in February, but this pace also slowed compared to earlier months.

On a seasonally adjusted basis, the economy grew just 0.25% from January to February. For the first two months of 2025, the cumulative growth rate stands at 2.17% compared to the same period last year.

While these figures show the economy remains in positive territory, the rate of expansion lags behind historical averages. Since 2001, Colombia’s leading economic index has averaged 3.7% annual growth.

Business leaders in Colombia have raised concerns about the composition of recent growth. They note that public administration and services, rather than productive sectors like industry or agriculture, contributed most to the expansion.

Colombia’s Uneven Recovery Amid Economic Challenges

This dynamic has raised questions about the sustainability of the recovery and the risk of over-reliance on government spending. Forecasts for the rest of 2025 suggest moderate improvement.

Analysts expect GDP growth to reach around 2.5% for the year, with projections rising to nearly 3% in 2026. Consumption and investment are set to drive this recovery, supported by gradually falling interest rates and easing inflation.

However, persistent weaknesses in manufacturing and agriculture, along with a widening external deficit, pose ongoing challenges. Colombia’s economic story in early 2025 is one of uneven recovery.

Services and public spending keep the economy afloat, but the contraction in core productive sectors signals underlying fragility. Policymakers and businesses now face the challenge of reigniting broad-based growth while managing fiscal and external risks.

More: Colombia news in English, every day from The Rio Times.

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