Over the past few years, Colombia has endured mounting economic challenges. The country’s significant public debt and widened deficit, persistent inflation and weakened currency, have contributed to fiscal instability. Additionally, weak investment and high informal unemployment have hindered Colombia’s economic growth.

In 2024, Colombia recorded a government debt to gross domestic product (GDP) of 61.3% of the country’s GDP, which is projected to reach 55% by the end of 2025, according to Trading Economics. In the third quarter of 2025, Colombia’s GDP expanded by 1.2% over the previous quarter, per a Trading Economics report.

In October, Congress reduced the government’s proposed budget, creating a funding gap of COP 16 trillion (0.8% of GDP) that was intended to be covered through additional revenue measures; however, in December, Congress rejected those proposed measures.

“Fitch forecasts a further deterioration in the CG deficit in 2026 to 7.5% of GDP, above the government’s budget target of 6.2%, as the interest burden normalizes and that the outcoming and incoming authorities will be unable to take sufficient spending adjustments,” reads a Fitch report. “Primary spending growth should moderate next year but remain higher than nominal GDP while the primary deficit rises further to 3.1% of GDP.”

In November, Colombia’s annual inflation rate decreased to 5.3%, according to Trading Economics, the first time in five months from October’s 13-month high of 5.51%. This rate came in below market forecasts of 5.45%. Although, inflation remained well above the central bank’s 3% target. To combat fiscal pressures, the Colombian central bank maintained its benchmark interest rate at 9.25% in June. 

Colombia has maintained macroeconomic stability through strong institutions, like inflation targeting, exchange rate flexibility and fiscal rules. While economic growth has been steady, it’s not enough. Productivity has stagnated for the last two decades, slowing progress toward closing the gap with high-income economies and reducing social and regional inequalities.

Research has shown positive projections for Colombia’s economy. From 2025 through 2027, GDP will be driven by domestic demand, including resilient household consumption, supportive public spending and investment boosted by a healthier construction sector, BBVA Research reports. “Persistently high inflation, cautious monetary policy and a wide fiscal deficit weigh on the outlook,” the report reads. 

In November, Colombian customers paid 34 days beyond terms on average, according to the FCIB Credit and Collections Survey, a 26-day increase from March. Of those working with Colombian businesses, 50% reported that payment delays remained the same, a 6% decrease from earlier in the year. Previously, the most common causes for payment delays were government approval (67%) and central bank issues (50%). Recent results revealed that regulatory issues, unwillingness to pay, cultural norms and customs and customer payment policy are the largest drivers of past-due payments (all at 40%).

Considering the various factors impacting payment behavior, credit professionals are closely monitoringColombian accounts. “Maintain communications with the customer and if needed, block orders,” one survey respondent advised. “Follow Know Your Customer (KYC) practices, as we are seeing a rise in fraudulent activity,” said another.