Overcoming unequal growth between sectors, strengthening investor confidence, solving cash squeezes and ensuring compliance with the fiscal rule, are some of the tasks with which 2025 began for the Ministry of Finance and President Gustavo Petro, a year in which the progress of the economy is expected to be maintained.
Although market projections speak of GDP continuing to grow, much better than in 2024, the challenge is to ensure that the rebound returns at least to the average, above 3%, and that it stops depending on sectors. as volatile as public or consumer administration.
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In this sense, the country’s behavior in fiscal matters will be important, since other important elements emerge from it, such as the decisions of the Bank of the Republic and that interest rates may fall at a faster pace. This is without taking into account the fact that a reactivation plan must be implemented.
Banco Itaú projects that the cycle of gradual relaxation will continue amid fiscal tensions, which is why they maintain their GDP growth forecast at 2% for 2024 and 2.4% for 2025.
Economic growth
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“Entertainment and agriculture, among other sectors, supported the dynamic of the activity. We also expect inflation to end at 5.1% in 2024 and at 3.7% in 2025, since the disinflationary process will continue, and now all eyes are on the effects that the increase in the minimum wage will have,” they stated.
These analysts noted that spending cuts in next year’s budget seem necessary if the fiscal rule is to be complied with and that although the fiscal risks of the participation reform are slightly reduced, uncertainty persists in the medium term, so it is not This front can be neglected.
Investment and consumption
Another analysis that helps to understand how 2025 starts is that of BBVA Bank, according to which the country’s Gross Domestic Product will grow 2.5% in 2025 and 3.2% in 2026, driven by private consumption of durable goods. , semi-durable goods and services from 2026, and by fixed investment in infrastructure, machinery and housing.
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“Inflation will be 3.1% in 2026, with lower interest rates that will strengthen financial conditions. Fixed investment will grow 3.9% in 2025 and 7.3% in 2026, led by civil works and machinery and residential construction will rebound from mid-2025, while private consumption will grow 3.1% in 2025, driven by goods durable and semi-durable, and 2.9% in 2026, when services will regain dynamism with better working and financial conditions,” they highlighted.
These experts also took a look at the job market and said that “the national unemployment rate will decrease to 9.9% in 2025 and 9.8% in 2026, with job creation in manufacturing, construction and services. Although there is an improvement, gaps in the labor participation of young people and women remain a challenge.”
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What will happen with the generation of employment in Colombia is another front that draws the attention of experts at the beginning of the year, since it remains close to double digits and the bets assume that it will remain that way until 2026. However, they suggest that this is also due to a drop in people looking for jobs.
The current gross domestic savings, equivalent to 10.5% of GDP, limits the ability to finance the necessary investment. It is necessary to diversify exports, continue attracting foreign direct investment and strengthen public and private savings.
On the other hand, according to Bancolombia’s Nowcast, it has already made a first review of the economic activity data and in its calculations it shows that Colombia’s productive activity in the fourth quarter of 2024 expanded at an estimated annual rate of 2 .5%.
“This means an advance of 50 basis points compared to the moving quarter finished in November (2%). Under this estimate of our indicator, the Colombian economy throughout 2024 grew at a rate of 1.8%,” they highlighted.
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With this on the table, they added that the GDP growth forecasts for the fourth quarter “based on our indicator (2.5% annually) reflect greater optimism about the performance of the economy compared to the expectation of the consensus of analysts, who On average, they predict that, during this last stretch of the year, activity expanded at a rate of 2.1% annually.”
View by region
For the Fedesarrollo economic research center, Colombia will grow 1.8% in 2024 and 2.6% in 2025. However, these economists went further and took a look at the regions, reporting that they expect the Caribbean and the eastern region lead growth in 2024, driven by the agricultural and public administration sectors.
Municipalities
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“Bogotá and the Pacific region would show a performance aligned with the national average, while the Central region would grow below this due to the contraction of the industry. For its part, the Amazon-Orinoquía would experience a slight acceleration thanks to the agricultural sector and the public administration, although it would continue to be the least dynamic region due to the contraction in the mining sector,” they noted.
Although changes in economic dynamics favored to the northern territories of the country, for Fedesarrollo there are several elements that compensate for the decline, although it highlights the Atlantic as one of the greatest markers of growth during the year that has just ended and recommends maintaining the path that took them there.
“Compared to the previous edition, the growth of the Caribbean region was revised downwards, compensated by upward adjustments in the Pacific and Central regions. Likewise, the behavior of the department of Atlántico is highlighted, which registered the lowest growth within the quarterly indicator of departmental economic activity, which is why emphasis should be placed on the current situation of this department,” they added.
Finally, these experts stated that in the medium term, economic leadership would fall to the Caribbean and Bogotá regions, followed by the Central, Eastern and Pacific regions. while the Amazon-Orinoquía would continue to lag behind the national average.
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