(Picture: Canva)
Economic Projections and International Context
Fedesarrollo presented the latest update of its Economic Outlook, providing projections for 2025 in terms of growth, inflation, external sector, and fiscal accounts, considering both international and domestic contexts.
By 2025, the trend observed in 2024, when the global economy grew by 3.2%, is expected to continue, slowing to 3.3% by 2023 due to restrictive monetary policies, regional conflicts, and financial market volatility.
Growth Outlook
The global growth expectation for 2025 is 3.1%, below the historical average of 3.7%, due to continued international trade restrictions and global tensions between China and the United States.
For Colombia, Fedesarrollo maintains its growth projection at 2.6% but identifies risks that could lower it to 2.0%. These risks include lower external demand, global and local uncertainties, persistent inflationary pressures, and high interest rates that could impact consumption and investment.
Exchange Rate and Economic Challenges
Fedesarrollo projects that the exchange rate in 2025 will be within a range of US$ 4,300 to US$ 4,400, with a median of US$ 4,341. This would imply a depreciation between 5.6% and 8.0% compared to the 2024 average (US$ 4,073). This scenario is driven by uncertainties related to the trade war and public finance sustainability due to declining commodity prices and contractions in oil and coal production.
To meet the fiscal rule, spending cuts of at least US$ 28 trillion, equivalent to 1.7% of GDP, will be necessary in 2025. Net debt is expected to continue rising in the medium term.
Growth Characteristics
In 2024, all Colombian regions experienced growth acceleration compared to 2023. The Pacific, Central, and Bogotá regions were the main growth drivers, driven by public administration, agriculture, and services in Bogotá.
In contrast, regions heavily dependent on mining, such as the Oriental, Caribbean, and Amazon-Orinoquia regions, grew below the national average. For 2025 and 2026, Bogotá and the Pacific region are expected to lead growth, driven by trade expansion, dynamic public administration, and industrial recovery.
Reduced oil and coal production will continue to negatively impact regions such as Amazon-Orinoquia, Caribbean, and Oriental.
