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While the peace process and divisive politics in Bogotá will be thornier issues, Duque's management of the fiscal deficit will prove tricky even amid rising GDP growth rates.

This quarterly GDP growth represents an uptick from the meager 1.8% full-year growth in 2017 and is well above the 1.3% growth in the first quarter of 2017.

Growth will be driven by higher commodities prices, improved household consumption, and a more balanced performance across various sectors.

The move continues a year-long rate-cutting trend but surprised a market that expected the Banco de la República to leave the rate steady.

The bank left the door open for a future rate cut, saying that the interest rate is now "close to its neutral level, although there is uncertainty about that level."

The Banco de la Repúblcia said that its decision was impacted by the "weakness in economic activity."

The 3.99% rate is 38 basis points below the 4.37% annual inflation seen in May and less than half of the 8.60% rate in June 2016.

"The economy is slowing down or not growing much, and on the inflation side we have good news but not good enough," said Echavarría.

Most analysts are equating the underwhelming growth to low consumption following the recent tax hike that increased Colombia's VAT by 3%.

The 25-point cut narrowly won the day among central bank board members with a 4-3 vote. All three dissenters preferred another 50-point reduction.