Colombia’s Economy Edges Toward Recovery with 2% Growth in Late 2024

Colombia’s economy showed modest signs of recovery in 2024, with Bancolombia estimating 2% year-over-year GDP growth in the fourth quarter. This brings the full-year growth to 1.7%, a slight improvement from the 0.6% recorded in 2023.

The National Administrative Department of Statistics (DANE) will confirm these figures on February 17, but the projections suggest a steady, albeit slow, rebound. The quarterly performance revealed uneven progress.

GDP grew by 0.7% in the first quarter, accelerated to 2.1% in the second, and stabilized at 2% in the third and fourth quarters. However, a minor contraction between the second and third quarters highlighted lingering challenges.

Private sector activity fueled much of the growth, particularly in services, agriculture, and mining. Sub-sectors like trade, transportation, and accommodation benefited from recovering private consumption and easing inflation, which fell to an estimated 5.4% by year-end.

Public sector contributions were limited due to fiscal austerity measures and a 1.2% annual decline in public administration activity in November. Agriculture remained strong thanks to stable weather conditions, while mining faced setbacks from reduced coal and petroleum production.

Manufacturing and construction saw slower growth due to weak investment and high borrowing costs. However, civil works improved as financing conditions eased.

Household consumption—making up nearly three-quarters of GDP—showed positive trends, particularly for durable goods. However, private investment stagnated amid economic uncertainty.

Looking ahead to 2025, analysts project GDP growth of up to 2.8%, driven by stronger domestic demand and lower interest rates. Yet structural challenges like high unemployment and regional disparities persist.

For investors and policymakers, these figures underscore the need for balanced strategies that stimulate growth while addressing long-term vulnerabilities.