Historically, not only in Colombia but around the world, incoming presidents and prime ministers typically achieve only a fraction of what is promised during their campaigns. Even if 30% of commitments are delivered, Abelardo could still disappoint some of his supporters, particularly those in Medellín who became deeply disaffected with Gustavo Petro’s administration. Ultimately, only time will tell. Much has been promised, but the pudding still has to be proven.

One major challenge will be the currency, which has moved to levels not seen in many years. The peso reached COP 3,100 against the dollar on Friday, and while many had feared a move toward COP 3,000, the surprise decision by Banco de la República to leave interest rates unchanged at 12%, despite rising inflation, quickly reversed that trajectory. COP 3,200 appears possible as the week begins.

These are extremely challenging levels for exporters and, in turn, for Abelardo, who has promised a golden age for overseas sales. Key sectors such as coffee and flowers have already publicly expressed concerns about declining competitiveness. Even if the new administration succeeds in creating a new oil boom, revenues generated at current peso levels will be significantly lower than anticipated.

The past four years have been dominated by discussions around debt and deficits, which economists understand are the cumulative result of decisions made by previous governments. These pressures are unlikely to ease if the peso remains at current levels.

Consumer confidence from Fedesarrollo remains solid. Retail sales are supporting imports of durable goods, particularly vehicles and electronics, adding more than $1 billion USD to the monthly deficit.

Other sectors likely to feel pressure include tourism and real estate, both of which have experienced significant growth in recent years. Colombia has become an increasingly fashionable destination, and many visitors have later returned to invest in houses and apartments. Today, however, those investments have slowed, while visitors are finding hotels, restaurants and excursions considerably more expensive than they were two years ago.

The reasons behind the peso’s current level are many, but a key factor has been investment flows into Colombia’s attractive local TES bond market through carry trade strategies. That said, profit-taking could soon emerge, particularly if investors begin positioning for a stronger dollar.

Let’s see how “The Tiger” addresses the challenge.

My regards,

Roops

Colombia’s unemployment rate has held in single digits on a rolling-quarter basis since March 2025, but a closer look at the data shows the improvement rests on weaker foundations than the headline figure implies, according to the latest Radar Bancolombia weekly report, published June 16 by Grupo Cibest, the research arm of Bancolombia (NYSE: CIB, BVC: BCOLOMBIA).

The report’s authors argue that the jobs Colombia is adding are increasingly vulnerable, more dependent on public spending, and of lower quality — limitations the unemployment rate alone does not capture.

The inactivity behind the falling jobless rate

The unemployment rate counts only people actively looking for work, so those who stop searching — the inactive — drop out of the measure even though they still weigh on the market.

“The employment being generated is increasingly vulnerable, more dependent on public spending, and of lower quality.” — Radar Bancolombia, June 16, 2026, Grupo Cibest

Using the metaphor of an iceberg, Grupo Cibest describes unemployment, near 8.7% on a moving-year average to April 2026, as the visible portion. Meanwhile, inactivity, sits below the surface, exceeding 35% of the working-age population according to the report. Between January 2020 and February 2026, the ratio of inactive to unemployed people rose from 4 to 5 for every unemployed person, suggesting the drop in unemployment reflects not only more opportunity but also people leaving the labor force.

Formal jobs, fragile foundations

Formal employment has been rising, but the report flags long-term weaknesses. The Bancolombia Formality Index, part of a new set of employment-vulnerability indicators, closed March 2026 at 72.7 points, above its 2022–2025 average and well above the 50.5 points recorded in March 2025.

Formality and coverage of health and pension contributors both increased through 2026, which appears positive at first glance. Much of that covered employment, however, does not stem from a genuine private-sector recovery. The report’s hypothesis is that the minimum-wage increase at the start of the year raised the cost of formalizing jobs, discouraging formal hiring at the moment the economy most needed it.

Quality is the bigger worry

The Bancolombia Employment Quality Index — which weighs formal workers’ income relative to the minimum wage, the mix of dependent and independent workers, and the share of non-vulnerable formal jobs — stood at 20 points in March 2026, below the prior year and marking a change in trend from the preceding three years. The deterioration reflects a lower income relative to the minimum wage in 2026 compared with the 2022–2025 average, a narrowing gap between dependent and independent workers that points to more independent and vulnerable formal employment, and a rising share of independents within total formal workers.

The report concludes that Colombia needs sustained formalization that does not rely on public spending as the main engine of job creation, nor on minimum-wage adjustments as the main tool of labor policy. The underlying figures draw on the National Administrative Department of Statistics (Departamento Administrativo Nacional de Estadística, DANE) and its Gran Encuesta Integrada de Hogares (Great Integrated Household Survey, GEIH), with calculations by Grupo Cibest.

Other highlights of the Report

On the domestic economy, the report noted that the Economic Policy Uncertainty Index from the think tank Fedesarrollo eased in May from a high April reading, and estimated that Colombia’s economy grew at a solid pace in April, with commerce expanding at double digits, manufacturing recovering gradually, and consumer confidence likely remaining in double digits in May.

In local markets, the fixed-rate TES curve — Colombia’s peso-denominated government bonds — gained 34 basis points on average the prior week, and the report cited a projected fiscal deficit of 5.3% of GDP under the 2026 Marco Fiscal de Mediano Plazo (Medium-Term Fiscal Framework). Pension fund managers and commercial banks led May purchases of class B TES in the secondary market. The Colombian peso appreciated in line with global and regional trends, while crude prices fell on the prospect of a US–Iran agreement and OPEC approved a fourth consecutive output increase for July.

Stock photo by Kevin Seibel via Pixabay.

Two decades of fiscal data show that Colombia’s gross general government debt has moved through four distinct macroeconomic phases, ending the current cycle at a level that is materially higher than its pre-pandemic baseline. Persistent annual fiscal deficits, currency volatility, an emergency spending shock and weaker-than-projected tax revenues have combined to push the ratio of public debt to gross domestic product from the mid-30s percent range in the mid-2000s to a band of roughly 60 to 62 percent at the start of 2026, according to figures published by the Ministerio de Hacienda y Crédito Público and the Banco de la República.

The shift carries direct implications for sovereign bondholders, multinationals operating in Colombia and any investor pricing country risk in the Andean region. All three major rating agencies — S&P Global Ratings, Moody’s Ratings and Fitch Ratings — now place Colombia in speculative-grade, or junk, territory, with consecutive downgrades through 2025 and into early 2026.

“The activation of the escape clause confirms that the deterioration observed in 2024 will not be corrected in 2025.” — Renzo Merino, sovereign analyst, Moody’s Ratings

The commodity cushion: 2006 to 2014

During the global commodity supercycle, Colombia benefited from sustained gross domestic product growth and steady government revenue. Hydrocarbon and mining receipts — channeled through Ecopetrol (NYSE: EC; BVC: ECOPETROL) and the broader extractive sector — supplied a substantial share of national tax intake. The debt-to-GDP ratio remained relatively stable during this period, generally hovering between 34 and 38 percent. Even with chronic primary deficits, nominal growth in the denominator absorbed new borrowing, masking the underlying structural imbalance that the Comité Autónomo de la Regla Fiscal (CARF) would later flag as the persistent driver of fiscal stress.

The currency and revenue shock: 2014 to 2019

The mechanics of the ratio changed sharply when Brent crude prices collapsed in late 2014. Reduced hydrocarbon royalties widened the fiscal gap just as the Colombian peso depreciated against the US dollar. Because a significant share of Colombia’s sovereign liabilities is denominated in foreign currency, the peso’s slide automatically inflated the local-currency value of outstanding external debt when measured against domestic GDP. The combined effect — wider deficits funded by new borrowing, plus a valuation effect on existing dollar-denominated obligations — pushed the ratio steadily higher through the late 2010s.

The structural revenue weakness that surfaced during this period has remained a recurring theme in subsequent fiscal assessments from Fedesarrollo and the Pontificia Universidad Javeriana Observatorio Fiscal, both of which have noted that successive tax reforms failed to fully close the gap between commitments and ordinary income.

The pandemic ceiling: 2020

The combination of emergency social spending under the Ingreso Solidario program, expanded health outlays and a sharp contraction in nominal GDP drove the ratio to a historic peak above 65 percent in 2020. The Ministerio de Hacienda reports the all-time high at 65.3 percent of GDP that year. The government activated the escape clause of the regla fiscal — Colombia’s fiscal rule, codified in Law 1473 of 2011 and modified by Law 2155 of 2021 — to accommodate the spending response, suspending the rule for 2020 and 2021.

That episode also triggered the first sovereign downgrade cycle: S&P Global Ratings cut Colombia’s long-term foreign currency rating to BB+ from BBB- in May 2021 after the administration of then-president Iván Duque withdrew a tax reform bill following street protests, costing the country its investment-grade status with that agency.

The new baseline: 2023 to 2026

Strong post-pandemic nominal growth briefly pulled the debt ratio down toward 57 percent in 2023. The decline did not hold. Structural spending pressures, elevated international interest rates and tax collections below budgeted projections pushed the ratio back up, establishing a new operating band around 60 to 62 percent of GDP. The Ministerio de Hacienda reported government debt to GDP at 61.3 percent for 2024.

The administration of President Gustavo Petro and Finance Minister Germán Ávila Plazas activated the regla fiscal escape clause for a second time in June 2025, with the Consejo Superior de Política Fiscal (Confis) approving a three-year suspension covering 2025 through 2027. The decision came despite an unfavorable technical opinion from the Comité Autónomo de la Regla Fiscal, which concluded that legal conditions for activating the clause were not met outside of a national emergency. The clause had previously been invoked only during the COVID-19 pandemic.

According to the Marco Fiscal de Mediano Plazo (MFMP) presented by the Ministerio de Hacienda, net public debt to GDP is projected to rise from 53 percent in 2023 to 61.3 percent in 2025 and approximately 63 percent in 2026. The fiscal deficit for 2025 was initially projected at 7.1 percent of GDP and later revised to roughly 6.2 percent of GDP, with the administration targeting a deficit below 6 percent of GDP for 2026.

Debt service consumes a larger share of the budget

The cost of servicing this debt has reshaped the structure of the national budget. The 2026 draft budget presented by Minister Ávila totals $557 trillion COP, equivalent to roughly $134.7 billion USD, and represents 28.9 percent of GDP. Of that, debt servicing costs are projected at $102.5 trillion COP, or 5.3 percent of GDP, down from 6.2 percent of GDP in 2025.

The figures published by the Ministerio de Hacienda for domestic debt service in 2026 are higher when measured against tax intake alone: of an estimated $130 trillion COP in domestic debt service, $79 trillion COP corresponds to principal that can be rolled over through new issuances, while $51 trillion COP represents interest payments funded directly from the budget. Against projected tax revenue of approximately $300 trillion COP, that implies roughly one in every three pesos collected by the central government is allocated to interest on existing debt.

Rating agencies reprice the sovereign

The rating cycle has accelerated alongside the fiscal trajectory. Moody’s Ratings downgraded Colombia to Baa3 and subsequently into junk territory in 2025, citing the suspension of the fiscal rule. S&P Global Ratings issued a further downgrade in April 2026, its second cut in less than a year, on the same persistent deficit and debt concerns. Fitch Ratings also moved Colombia deeper into speculative grade in December 2025.

The Banco de la República reported external debt — combining public and private liabilities — at $238.7 billion USD at the close of November 2025, equivalent to 54.8 percent of GDP, an increase of $15.8 billion USD from January of the same year. The Colombian economy is currently valued at approximately $435 billion USD.

What investors are watching next

The Comité Autónomo de la Regla Fiscal has stated in its most recent reports to Congress that the 2025 primary balance target was missed by a wide margin even after the escape clause was activated, and that incoming projections for 2026 raise the bar for any return to the original fiscal rule by 2028. Business groups including Fenalco and the Consejo Gremial Nacional have publicly opposed the suspension and signaled potential legal challenges.

The 2026 financing plan disclosed by the Ministerio de Hacienda includes approximately $4.6 billion USD in global bond issuances, primarily to refinance a one-year Swiss-franc Total Return Swap operation valued at roughly $9.3 billion USD. The ministry has stated that the issuance does not constitute net new external debt. Updated debt and deficit targets are scheduled for release in the next iteration of the Plan Financiero.

For executives operating in Colombia or evaluating new investment, the baseline shift from a mid-30s to a low-60s debt-to-GDP environment alters several variables simultaneously: peso volatility tied to refinancing cycles, the trajectory of corporate tax policy as Congress weighs successive reform proposals, and the path of domestic interest rates set by the Banco de la República as it manages inflation alongside elevated sovereign funding costs. Detailed historical and forward-looking debt data is published by the Investor Relations Colombia office of the Ministerio de Hacienda.

Colombia’s General Government Debt-to-GDP Ratio (2006-2026) (image: Google)

Colombia’s Banco de la República is preparing for a significant shift in monetary policy as inflationary risks deteriorate. According to the latest report from the Dirección de Investigaciones Económicas, Sectoriales y de Mercados at Bancolombia (NYSE: CIB), persistent internal pressures and a less favorable external environment are driving the need for a more restrictive stance.

Bancolombia’s analysts expect the Junta Directiva of the Banco de la República to increase its policy interest rate by 100 basis points, bringing it to 11.25 percent. This forecast suggests that the first half of 2026 will be characterized by a more aggressive tightening cycle than previously anticipated, with the rate potentially reaching 12.75 percent.

The international landscape is playing an increasingly decisive role in these local policy configurations. A recent week of central bank decisions globally revealed a shift in tone among major financial institutions, primarily due to rising uncertainty stemming from the conflict in Iran. This geopolitical tension has directly impacted costs for energy, transportation, and agricultural inputs.

“The increase responds to the need to send a clear signal of commitment to price stability.” — Dirección de Investigaciones Económicas, Sectoriales y de Mercados at Bancolombia.

In the US, economic activity shows signs of moderation, yet producer price inflation in February exceeded expectations. The yield curve for US Treasuries, managed by the US Department of the Treasury, has shown mixed behavior as the conflict escalates, with the spread between 10-year and 3-month bonds reaching levels not seen since 2023. Inflation expectations in the US have rebounded in the short term, though they remain anchored over longer horizons.

Domestically, the business indices from think-tank Fedesarrollo showed mixed results for February. However, there are positive indicators in the labor market, as the urban unemployment rate across the 13 primary metropolitan areas continued its downward trend. Additionally, goods exports recorded an advance during the same period.

In the local fixed-income market, the TES fixed-rate curve saw a recovery last week. However, the March Financial Institutions Survey suggests that devaluations of TES may persist in the short term. Long-term TES Class B placements in the first quarter reached 1.0 percent of the GDP.

Chart based on data from Grupo Cibest & the Banco de la República.

Energy markets remain volatile as crude oil inventories in the US increased beyond expectations in the third week of March. Despite this, the price of Brent crude rose toward the end of the week, driven by skepticism regarding a potential ceasefire in the Middle East. The Colombian peso appreciated over the past week, tracking the intensity of the regional conflict.

The equity market results for the fourth quarter of 2025 remained neutral and aligned with market expectations. Global volatility continues to be shaped by energy shocks, geopolitical strife, and a cautious approach toward investments in artificial intelligence.

The projected rate hike by the Banco de la República is intended to send a definitive signal of commitment to price stability. This adjustment reflects not only recent inflation trends but also a strategic effort to prevent the further deterioration of expectations in a high-risk environment.

Headline image: Bogotá headquarters of Banco de la República (Banrepublica). Photo credit Juan Enrique Rodríguez, courtesy Banrepublica

The Colombian Council of State has issued a provisional suspension of the government decree that established a 23% increase in the national minimum wage for 2026. The judicial decision halts the implementation of the adjustment, which had set the monthly salary at $1,750,905 COP plus a transportation assistance allowance, totaling approximately $2,000,000 COP.

The suspension follows several legal challenges arguing that the administration of President Gustavo Petro exceeded its authority by setting an increase significantly higher than the 5.1% inflation rate recorded in 2025. The court found reasonable doubt regarding whether the executive branch adhered to the technical criteria mandated by Law 278 of 1996, which requires adjustments to be based on inflation, productivity, and economic growth.

Immediate Regulatory Timeline and Compliance

The high court has granted the Ministry of Labor an eight-day window to issue a new provisional decree. During this period, employers are instructed to maintain current payment levels until the new administrative act is published.

Legal experts emphasize that the ruling does not have retroactive effects. Juan Pablo López, managing partner at López & Asociados, told daily El Tiempo that payments made between January 1 and the issuance of the new decree remain valid. Companies are legally prohibited from discounting or requesting the return of the additional 23% already paid to employees for January and the first half of February.

Vicente Umaña, partner at Posse Herrera Ruiz, clarified to the same publication that while payments currently due must honor the 23% increase, the forthcoming decree will likely establish a lower rate. This adjustment will subsequently impact other costs indexed to the minimum wage, including administration fees, fines, and transport costs.

Economic and Labor Market Projections

The initial 23% hike sparked concerns among economic think tanks regarding formal employment and inflation. Fedesarrollo published an analysis suggesting that such an increase could lead to the loss of up to 600,000 formal jobs and a three-percentage-point rise in labor informality.

Economic researchers at Bancolombia (BVC: BCOLOMBIA, NYSE: CIB) estimated potential job losses could reach 734,000. Their data highlights specific sectors at risk:

• Professional activities: 390,537 jobs
• Commerce: 71,917 jobs
• Construction: 54,537 jobs
• Manufacturing: 42,774 jobs

According to Medellín-based El Colombiano, Camilo Cuervo, partner at Holland & Knight, noted that the Council of State’s language suggests the original decree may not survive a final merits review. Luis Fernando Mejía, CEO of Lumen Economic Intelligence, indicated that the suspension could serve to stabilize price escalations observed in early 2026.

Business Community and Government Reactions

The National Federation of Merchants (FENALCO) and the National Business Association of Colombia (ANDI) have addressed the ruling. Jaime Alberto Cabal, president of FENALCO, described the suspension as a necessary correction to an adjustment that did not reflect economic realities. Bruce Mac Master, president of ANDI, stated that the ruling establishes important jurisprudence for technical responsibility in wage setting.

Mauricio Montealegre, partner at Pérez-Llorca Gómez-Pinzón, observed that while the government could theoretically attempt to justify the same figure in a new decree, the president has called for a new concertation table to align with the court’s criteria.

Guidance for Employers

Business owners and human resources departments operating in Colombia should consider the following steps:

• Maintain Current Payroll: Continue paying the 1,750,905 COP base salary until the new decree is officially published in the government gazette.
• Avoid Retroactive Deductions: Ensure that no attempts are made to recoup the 23% increase already paid to staff for previous periods.
• Monitor the New Decree: Prepare for a mid-month adjustment in the second half of February, as the new rate will apply immediately upon publication.
• Contractual Review: Assess contracts and service agreements tied to the minimum wage to prepare for downward adjustments in indexed costs if the new rate is lower.

Photo © Loren Moss

Many headlines are tied to the fiscal situation in one way or another.

The $16 trillion COP tax reform which is related to the 2026 Budget is in such danger of being sunk by opposition forces that a ‘Plan B’ is already being discussed in the dark corridors of power. I am no tax expert, but it does seem a little top heavy on unpopular measures that might get a Congress member voted out in March if they were to vote for it. Ministerio de Hacienda Avila is struggling on this one.

The tax collection data through October has been published by the DIAN and despite an 11.28% YoY increase to $249 trillion COP and a very healthy $20 trillion COP collection for the month, experts are anticipating that there will be a shortfall of up to $11 trillion COP versus the FY $305 trillion COP target.

The Departamento Administrativo Nacional de Estadística – DANE Colombia revealed the latest Total Productivity number which rose 0.91% YoY – this is relevant for the country as it will be added to the FY25 CPI estimate of 5.51% to give us a baseline for the impending Minimum Wage discussions. In reality 6.42% won’t be a number even taken into consideration by anyone except the public sector – 10% would be a success & 12% a real possibility.

Fedesarrollo reported the latest Industrial (4.9%) & Retail (22.8%) Confidence data for October. Whilst both are healthy numbers there was a decline on the Industrial side MoM whilst Retail rose.

White Noise Section

The CNE (Electoral Council) is possibly going to sanction Gustavo Petro for exceeding spending limits in 2022. It’s taken three years to discover he probably did what every other candidate ever did. File that alongside candidates photographed with drug lords and the section that says incumbent officials shouldn’t comment on politics.

The US Government (or some low lying official) is stating once again that the strained relations between the two countries could harm trade – a week after 70% of tariffs were removed on Colombian goods. The world is ever more bored and less intimidated by TACO man and almost ironically, if he has finally found a foe small enough to beat in the shape of Venezuela, the number one benefactor would be Colombia.

Have a wonderful day and extended Thanksgiving!

Thanksgiving turkey (photo © Loren Moss)

We are six months away from the presidential elections and the government will perhaps look to reward their supporters with a new shiny salary. Whilst this may seem scandalous it is nothing new – the Duque administration agreed to a then-unheard of 10.1% increase as we headed into the 2022 elections.

But that doesn’t make it right. Petro has spent two years railing against the Banco de la República – Colombia for not reducing overnight rates at a faster rhythm – we are at 9.25% and we will be at the same level on New Year’s Eve according to Fedesarrollo. Pouring a 12% salary increase – which feeds into many other facets of Colombian life which are indexed to the same decision.

The economy is going very well and most indicators are heading in the right direction, however that domestic demand is already propping up inflation, driving imports and in turn the country’s deficit. An excessive minimum salary increase is a threat on two fronts. It will impact inflation as suppliers face higher costs and also further push that domestic demand – in an ideal world those on minimum wage would save those extra earnings, but Colombians aren’t built that way.

****All this is easy to say when you aren’t trying to live in a few dollars a month, but equally it needs to be said.***

Elsewhere, September exports from Departamento Administrativo Nacional de Estadística – DANE Colombia rose 11% to $4.6bn driven largely by agriculture. But there was an 11.7% decline (to 13.7mn) in oil barrels sold overseas. Import data in a week’s time will surely condemn us to another huge monthly deficit.

Aside that relatively quiet except for aged politicians desperately looking for an alliance in order to protect the elite from those who would perhaps question their role in Colombia.

Have a great end to the week.

Regards

Roops

No hard working Colombian ideologically has any issue with the cocaine barons being cut off at the knees, however the current tactic of destroying motorboats with missiles from miles away, isn’t the way to go. They may well be up to no good, but with no evidence whatsoever, Trump and his War Department are only alienating themselves further from the countries of Latam. Both Venezuela and Colombia have seen boats attacked, whilst Ecuador have cited the death of one of their innocent citizen in another.

The question is why not stop one of these boats and prove what their ‘irrefutable’ intelligence is telling them ? Therein lies the dilemma for many – Colombian security forces have reported record seizures this year, it would be easier to quantify the situation if the US did the same.

Instead, we have no remorse from Trump, his peanut gallery in Florida or the henchmen who are ordering the attacks – from a nice safe distance. All the while, further inflaming the pre-election polarization in Colombia.

Fedesarrollo lastest October survey saw YE Overnight Rate expectations rise to 9.25%, where we are now, as the CPI estimate also rose from 5.08%-5.28%. Part of the reason for this is GDP which whilst unchanged (2.6%) for 2025, rose 0.1% to 2.9% for 2026. The same survey expects the Stock Market to continue rising despite already surging 56.5% ($ terms) YTD.

This ongoing economic improvement led to another dent in the deficit situation according to Departamento Administrativo Nacional de Estadística – DANE Colombia. August saw another $2bn added as Imports rose 5.7% YoY whilst Exports dropped 0.1% driven by an 18.1% decline in extractive industries.

Bancolombia also reported economic resilience, with real spending growing 4.72% YoY in September according to their own internal studies.

Away from this week the news is hard to fathom. What is true, rumor, propaganda, pre-election bunkum or influencer imagination…and it is only going to get worse.

Have a good day

Roops

We already touched on the United Nations this week, where Gustavo Petro called out Donald Trump on Venezuela, Gaza, climate change, and narcotics. It’s a hazardous game, but pushing back on a bully is never a bad thing.

Naturally, it caused consternation amongst some locals, namely ANDI – Asociación Nacional de Empresarios de Colombia, and the private sector, who put profits ahead of any global crisis. Politicians to the right were also in a tough spot, after all, they largely have the compassion level of the current White House, whilst having perhaps been too vocal in their cringing congratulations when Trump took office.

Imports from Departamento Administrativo Nacional de Estadística – DANE Colombia, a reflection of domestic demand and economic confidence, hit a new high in July, up 16.2% to $6.5 billion USD, a 22-month high. The Peso has strengthened rapidly of late, along with the stock market, and that will only add to overseas spending. The problem, of course, is the deficit ($1.6 billion USD), which again had a crushing month.

Fedesarrollo released its September survey. Whilst YE overnight rates (9.0%) and GDP (2.6%) were stable, there was a bump in inflation from 4.94% to 5.08%. This last number is perhaps a big factor in a small decline in retail and industrial confidence for August.

Thus far, an odd week in Colombia, which closed with The Economist titling a pretty tepid piece of journalism “Is Colombia at the Gates of Hell” – a wildly inaccurate way to frame the current situation and more befitting of social media sensationalism. Will the next president have plenty to do? No question. Did Iván Duque hand over a mess? Likewise.

Have a great Friday.

Regards.

Roops.

Never miss Rupert’s latest commentary.
Follow him now on LinkedIn to see What Jumps Out.

Colombian Peso. Photo credit: Jared Wade.

FARC dissidents downed an electricity pylon near Medellín in what the governor described as a terrorist attack on Antioquia. No Colombia – Antioquia. Subtly and indirectly, the blame was pointed in Petro’s direction amidst the continued whiff of federalism. Medellín Mayor Fico Gutierrez was nowhere to be seen as he was busy in Washington trying to score points versus Gustavo Petro, having already been told not to go.

Perhaps the real tragedy is that a steel pylon makes more headlines than any of the 140 social leaders assassinated thus far in 2025 – on course for an annual record. Unfortunately, there is little political capital to be found in such tragedies.

Fedesarrollo reported a surprise drop in August consumer confidence to -2.4%. Arguably, stubborn inflation will prevent rate cuts, but overall, it doesn’t jive with packed-out shopping malls, booming vehicle sales, and increasing domestic demand, which is driving imports upwards.

We have been hearing for the longest time, from the opposition, of course, that Colombia is an investment pariah; that may be true, but this week it is struggling to stack up. The Ministerio de Hacienda completed the largest bond issue (€4.1 billion EUR) in the country’s history, but perhaps the real headlines were the total demand of €25.4 billion EUR. What could drive such madness amongst the international investment community? It could be a GDP estimate of 2.6% or record low unemployment, perhaps even the stock market, which is up 50% in dollar terms YTD and hit a record high this week. Or perhaps it is that the EMBI country’s risk levels have been at their lowest level since 2021?

What you don’t want to listen to is those who will claim that all the above is because Petro only has a year left in power. No one has a clue what will happen in June 2026, and the current lineup of presidential candidates is a rogues’ gallery of the failed and self-interested.

The 2026 budget debate was suspended for lack of quorum. Colombian politicians are as irresponsible as ever. If you are against the proposed $557 billion COP budget, then turn up, do your job, and debate it for the sake of the country. Above all, the government doesn’t have the votes to pass it if debated conventionally. The risk now is that it will be passed by decree. If it does, the blame doesn’t lie with the government, and the opposition shouldn’t come crying in 2026.

Also in Congress, Ministerio de Hacienda, German Avila was discussing a 40% haircut to the tax reform, wholly predictable; however, how that might be impacted by the above budget situation is tough to call.

Enough for today, have a wonderful end to the week.

My regards.

Roops.

Never miss Rupert’s latest commentary.
Follow him now on LinkedIn to see What Jumps Out.

FARC dissidents arrested in Putumayo, Peru during Operation Armageddon. Photo credit: Ministerio de Defensa del Perú/Wikipedia.