It projects that at the end of 2025, GDP will grow 2.5% and inflation will drop to 3%, if important challenges are fulfilled in fiscal policies.
International Monetary Fund experts (IMF) visited Bogotá to advance several meetings with different authorities and entities in order to evaluate the situation of the economy and raise perspectives, risks and priorities of financial policy.
“The Colombian economy navigates a complex panorama, characterized by both advances and growing challenges. Although growth has strengthened and inflation has decreased, fiscal challenges persist and private investment is still contained. Adverse external factors also cloud the panorama, ”warns the report.
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Initially highlights the IMF that After expansion by 1.7% percent in 2024, the economy grew 2.7% in the first quarter of 2025, promoted by private consumption in a solid labor market context and a dynamic services sector.
It also highlights the document that annual inflation fell to 4.8% in June, backed by properly restrictive monetary policy, “Although underlying inflationary pressures persist. The current account deficit was reduced to 1.7% of GDP last year, supported by strong remittances and a pronounced fall in dividend payments. International reserves have been further strengthened and remain at adequate levels.
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“The financial system remains solid and resilient”, Highlight the IMF.
On the total fiscal deficit of the governmentHe explains that it increased to 6.7% of GDP in 2024, compared to 4.2 percent of GDP in 2023. “As a result, gross public debt amounted to 61.2% of GDP at the end of 2024, which underlines the need for efforts sustained in the medium term, as contemplated in the most recent medium -term fiscal framework (MFMP).”
“In this context, the authorities also made use of the exhaust clause of the fiscal rule to emphasize the tax path for the 2025-2027 period. The budget project for 2026 contemplates a total fiscal deficit of 6.2 percent of GDP, in line with the MFMP, and a primary deficit of 2 % of GDP (compared to 1.4 % of the GDP planned in the MFMP)which would be financed mainly through a tax reform proposal, ”says the document.
Besides, projects that the growth of real GDP reaches around 2.5% at the end of 2025, partly supported by a certain flexibility of fiscal policy, before converging towards its potential level in the medium term. Inflation is expected to continue descending and reaches the 3% goal In early 2027, provided that the implementation of a prudent monetary policy is maintained.
“It is projected that the current account deficit is extended slightly this year (about 2.5% of GDP), due in part to a deterioration in the terms of exchange and higher tax deficits, which is now expected to reach 7.1% percent of GDP at the end of 2025, before beginning to decrease, conditioned to the constant implementation of policies consistent with the budget and the new medium -term fiscal framework of the authorities, ”adds the analysis.
Finally, he concludes that the risks for this panorama are still inclined downward. Greater global uncertainty and geopolitical tensions could affect growth both by real and financial channels, While stricter migratory policies in receiving countries could negatively impact remittances. Internal level, uncertainty about the implementation of policies and reforms could continue to brake investment.
Source: Integrated information system
