Economic Overview

Thanks to its market size, the extent of its natural resources (coffee, emeralds, oil and coal, among others) and a historical reputation as an exemplary debtor, Colombia has experienced a stable and solid growth for most of the past two decades. Although the country was affected by the fall in oil prices due to the pandemic, Colombia was able to recover and, in 2022, the country recorded a GDP growth of an estimated 7.3%. Nevertheless, economic growth slowed substantially since late 2022, and consumer and business confidence remained relatively weak. Moreover, financial conditions tightened amidst a rising cost of credit and more stringent lending criteria. Private consumption, a key driver of the strong recovery from the pandemic, also weakened. Overall, the IMF estimated a GDP growth of only 1.4% in 2023. Driven by a rebound of investment fuelled by the relaxation of financial conditions, GDP growth is expected to accelerate to 2% this year and 2.9% in 2025 (IMF).

Fiscal consolidation has been underway, yet there are concerns regarding adherence to fiscal regulations. The projected budget deficits, comprising 4.3% of GDP in 2023, 4.5% in 2024, and 3.5% in 2025, hover just within the thresholds set by the fiscal rule. Nevertheless, primary expenditures for implementing the reform agenda in 2024 surpass initial estimates. Additionally, oil, customs, and tax revenues in 2023 fell short of projections. Furthermore, fiscal strategies account for cyclical and uncertain revenues, particularly the anticipated collection of tax arrears through litigation, amounting to nearly 1% of GDP in 2024 and 0.6% in 2025, as outlined by the fiscal council. Overall, the IMF estimated the budget deficit at 2.9% of GDP last year, with an expected 2.6% deficit in 2024. In 2023, gross debt decreased to 55% of GDP and, looking ahead, that rate is expected to slightly increase to 55.4% by 2025 (from around 50% before the pandemic). Inflation in Colombia has been high and persistent due to weather-related and supply shocks over the past two years, alongside currency depreciation in 2022-1H23. Additionally, widespread indexation, including utility rates, rents, and education costs, contributes to inflation stickiness. The overall rate was estimated at 11.4% in 2023 by the IMF, with a sharp decline expected this year (5.2%) and in 2025 (3.6%), still above the upper 3+/-1% band of the central bank's target.

One third of the Colombian population lives below the poverty line. Development policies for rural areas are a priority for the Colombian government. Unemployment rates, which increased during the pandemic, declined to 10.8% in 2023, and should continue decreasing in the coming years - reaching 10.4% in 2024 and 10% in 2025. It should be noted, though, that more than half of the Colombian population continues to work in the informal sector. Overall, inequalities are strong throughout the country: Colombia has a Gini coefficient of 51.5, one of the highest in Latin America.

Foreign Trade

Colombia's foreign trade represents around 40.9% of the country’s GDP, according to the World Bank’s latest figures. Colombia mainly exports petroleum oils (32.9%), coal (18.3%), coffee (7.2%), gold (5.2%), and cut flowers (3.6%), whereas the country's main imports include petroleum oils (8.8%), telephone sets (3.9%), motor vehicles (3.5%), aircrafts (3%), maize or corn (2.8%), and medicaments (2.6% - data Comtrade 2022).

According to data from Comtrade, in 2022, the main export partners were the United States (26.9%), Panama (10.2%), Netherlands (4.7%), India (4.3%), and Brazil (4.1%); with imports coming chiefly from the United States (24.5%), China (24.2%), Brazil (7.1%), Mexico (5.4%), and France (3.2%). Colombia has signed trade agreements with the ANC countries (Andean Community of Nations), the MERCOSUR countries, the Central American and Caribbean countries and the European Union. Along with Mexico, Chile and Peru, Colombia founded the Pacific Alliance in 2012, designed to boost trade relations with Asian emerging markets. The country is also part of numerous free trade agreements with Chile, Guatemala, Honduras, El Salvador, Canada, Mexico, Switzerland, Norway, Iceland, Liechtenstein and the United States. The free-trade agreement with the United States, which came into force in May 2012, has had a particularly large impact in the Colombian economy, given that the United States is the country's biggest trade partner.

In 2022, the country’s goods exports increased by 41.4% to USD 57 billion, with imports following a slower pace (+26.6% y-o-y) to USD 77.4 billion. As per services, exports stood at USD 12.2 billion against USD 17.5 billion in imports (data WTO). The overall trade deficit was estimated at 7.2% of the country’s GDP, from 7.6% one year earlier (World Bank). According to data from DANA, in 2023, imports in Colombia fell by 18.9% y-o-y, while exports increased by 25.5%. The decrease in Colombian exports has also resulted in only a 3.8% growth in the number of national companies reaching international markets: from 8,890 companies in 2022 to 9,228 in 2023.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Colombia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.