Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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 7.6%, mainly due to increased household consumption - which should continue to drive the economy in the coming years, supported by the ongoing recovery on the job market and the continuous implementation of fiscal support programs targeting low-income households. According to the IMF, the country's economy is expected to grow at a slower pace in 2023 and 2024, with GDP reaching an estimated 2.2% and 2.8%, respectively.

Colombia's account deficit decreased to 5.1% of GDP in 2022, mainly due to the country's trade deficit and high dollar outflows driven by dividend remittances and repatriated income from foreign investors. However, a decrease in the trade deficit due to a slowdown in import demand is expected in 2023, which should lead to an account deficit of 4.4%. In 2022, government balance increased -7.7% of GDP, and while the deficit should continue in the coming years, that rate is expected to decrease to -4.1% in 2023 and -3.2% in 2024. Inflation increased to 9.7% in 2022, but it is expected to decrease to 7.1% in 2023 and 4.3% in 2024. Colombia’s public deficit remains a source of concern for the government and for investors. In 2022, gross debt decreased to 61.1% of GDP and, looking ahead, that rate is expected to slightly decrease to 60% in 2023 and 59.2% in 2024. Although the pandemic has significantly impacted the Colombian economy, the country has been recovering, following the implementation of the government measures to counteract the resulting economic crisis. Overall, Colombia's fiscal measures to mitigate the pandemic have been effective in boosting economic activity, which has been gradually improving.

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 11.3% in 2022, and should continue decreasing in the coming years - reaching 11.1% in 2023 and 10.5% in 2024. However, unemployment rates are not expected to go back to pre-pandemic levels in the short term. 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 50.4, one of the highest in Latin America. Corruption and security remain as major concerns for individuals and businesses.

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