Colombia’s External Debt Edges Higher As Private Borrowing Rises, Public Load Eases

Colombia’s foreign debt ticked up to about US$205.8 billion in August 2025, roughly 48.7% of the economy. That sounds big, but the ratio is almost unchanged from a year ago.

The real twist is under the hood: the government trimmed what it owes abroad, while companies borrowed more. Compared with August 2024, the total rose about 4%.

But compared with July, it fell slightly because the state paid down or refinanced some external liabilities. Public foreign debt sits near US$113.1 billion—flat year on year and down month to month.

Private foreign debt climbed to about US$92.7 billion, up roughly 9% as firms tapped overseas markets for refinancing and investment. It is also the lowest total debt level since March, showing the series still moves in a narrow band.

The story behind the story is about who carries the risk. When the government relies a bit less on foreign currency, it reduces immediate pressure on the budget if the peso weakens or global rates rise.

When companies borrow more in dollars, the sensitivity shifts to the corporate sector. That can be healthy if the money funds exports, productivity, or projects with natural hedges. It is riskier if it covers day-to-day costs without protection against currency swings.

Colombia’s moderate external debt balances risk and investment

Regionally, Colombia sits between Peru and Chile and above Brazil and Mexico. Chile’s external debt is around three-quarters of GDP; Peru is in the high-30s; Mexico in the low-30s; Brazil about a third.

At roughly 49%, Colombia is higher than Brazil and Mexico, close to Peru, and well below Chile—meaning less reliance on foreign funding than Chile but more than most large peers.

Practically, that mix puts slightly less strain on Colombia’s public balance sheet than in high-external-debt sovereigns, while shifting more responsibility to Colombian firms to manage currency and rate risk.

Why this matters for outsiders and expats: external debt shapes how a country reacts to a stronger dollar, higher global rates, or bouts of market nerves. A steadier public profile signals discipline and clearer priorities.

A busier corporate borrowing cycle can reflect investment and confidence—but it also raises the bar on risk management inside companies. The watch-list from here: progress on fiscal consolidation, the peso’s path, and whether corporate borrowing cools as growth levels off.

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