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.

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Colombian Peso. Photo credit: Jared Wade.

Elsewhere, a ‘relatively’ quiet week – likely because it is sandwiched between two long weekends – with the politicians somewhat becalmed.

The labor reform was signed into law by Gustavo Petro. Make no mistake, he has played this extremely well. It was dead in the dust a few weeks ago, and whilst not 100% of what he wanted, he has moved the needle for millions of workers. What will now happen with the decree, referendum & national assembly, remains to be seen, but one questions whether there is much appetite.

On the pension reform, which was sent back to congress, we await developments.

The ratings agencies were busy this week. S&P Global lowered Colombia’s rating from BB+ to BB (outlook negative) whilst Moody’s ratings lowered from Baa2 to Baa3 (outlook stable). In short – the long term fiscal situation.

Fedesarrollo reported industrial & retail confidence data for May, and they were interesting. Retail sales are booming, but retail confidence dropped marginally to +21% whilst industrial confidence rose from -0.3% to +6.1%, despite struggling manufacturing production numbers.

The Banco de la República – Colombia is expected by almost everyone to leave overnight rates at 9.25% today.

The Peso ($4042) has dropped to levels not seen in 2025; there are several factors at play. The US under Donald Trump is not a place to safeguard your money, the Colombian political temperature is subsiding, and the local economy continues in rude health. That final factor may not be convenient for the mainstream press, but the economy is growing well, unemployment is at record lows, and inflation is easing. The deficit remains a real concern, and it remains to be seen whether Ministerio Avila can both pass a robust tax reform and rein in government spending somewhat.

About it for this Friday. Have a great day.

Roops.

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Colombian Peso. Photo credit: Jared Wade.

In parallel, we have the text of the revived labor reform being prepared for submission to the 4th commission of the senate. These texts could have been ready Friday, May 23, but two members of what is a hostile panel, having pressing family matters, and it was delayed it until May 26. If that doesn’t sum up the wanton disrespect for the office they have been elected to, nothing does. Will we ever see the new proposals debated? Gustavo Petro seems doubtful, so the mess will continue. ANDI – Asociación Nacional de Empresarios de Colombia is backing it, which may offer some hope.

The fiscal situation also requires a lot of makeup. March saw the YTD deficit at 2%/GDP – a year ago it stood at 1% and ended 2024 at 6.7%. Aside from government revenues falling short of its spending plans, we have continuing monthly trade deficits. Departamento Administrativo Nacional de Estadística – DANE Colombia reported improved export data last week, driven by agriculture; however, imports also rose 16.5% to $5.5 billion USD. That led to a deficit of $897 million USD, down on recent months but up 38% YoY. The rapid ascent in domestic demand for consumer goods means this situation is likely to continue.

Whilst tax revenues are rising post reforms, they are still below target levels and the DIAN (IRS) announced this week they are working with 19,000 who are struggling to pay their taxes. Clearly a country where too many companies aren’t accustomed to paying their full share – and this is in an expanding economy.

Ecopetrol have had a busy week. They have purchased 10 green energy projects amounting to 1.3gw which surpasses it 900mw target for this area of its portfolio.

Finally, a word on the markets. The Peso continues to steadily strengthen ($4169) whilst the stock market continues to hand tough and is up 26.4% YTD in dollar terms. The joke remains on the local brokers who have spent the Petro years scaring their high net worth individuals into paying high fees for low returning US markets.

Have a great day.

Roops.

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Colombia Central Workers Union. Photo credit: CUT Colombia/Facebook.

The government is demanding that the vote be reopened or repeated, and Gustavo Petro is calling for public protests. In the middle of this, there has been an attempt to revive the original Labor Reform bill by the opposition, but this is seen by many as a red herring to confuse the senate voting process. Lawyers are involved and it is a total mess. Whatever little respect for the political leaders of Colombia that still existed, is trickling away rapidly. Frankly speaking – pathetic.

Petro himself signed up for the New Silk Road in Beijing along with other Latin American leaders. While the orange man is sleeping in Washington, China will happily be handing out low-cost loans and/or tendering at low cost for projects in the region. Donald Trump’s team is not happy, but Colombia and the rest of Latin America cannot be blackmailed or bullied by a man who is slowly but surely losing the plot. Again, how will the hard right politicians, such as Iván Duque, get back out of their huge support post-election for Trump, who, since January, has been busily trying to torpedo the local economy.

The economy itself continues to grow. Departamento Administrativo Nacional de Estadística – DANE Colombia reported that Q1 GDP was 2.7% (est 2.6%) versus 2.4% a year ago. The principal drivers were commerce (3.9%) and agriculture (7.1%), which contributed over 50% of the annual growth. The Economic Activity (ISE) rose 4.5% in March, drafting the reading for January & February.

On the negative side Q1 investment whilst still rising slightly was still down 8.1% YoY. Whilst the opposition will gladly point at the government, it is equally down to the chaos we are seeing in congress where self-interest is taking priority over the state of the nation. The Peso ($4194) has recovered and has joined the stock market in outperforming most of the markets around the world.

Have a great end to the week.

Roops.

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Colombian President Gustavo Petro and Chinese leader Xi Jinping in Beijing. Photo credit: Gustavo Petro/Facebook.

Colombia is a tough call in terms of impact. Many of its exports to the US are inelastic in terms of demand, but it is a good moment to look around for new markets. According to the press, Colombia is in the 10% bracket, and US negotiators will arrive in May to thrash out the details. The political skirmish with the US from last weekend already appears to have blown over, which suggests there may have been a lot of exaggeration involved.

Forex traders are suffering, as are those with international trade. The Peso jumped above $4400, then fell back – where it will be next work is a guesstimate at best. There was good news from Departamento Administrativo Nacional de Estadística – DANE Colombia on the inflation front for March with a 0.52% reading, which translated into 5.09% on a 12m basis. Consensus expectation from Fedesarrollo was 5.17%. This surely now gives Banco de la República – Colombia the space to lower rates in a couple of weeks.

One area where Colombia is caught in a trap is on gas. Local production has struggled, and whilst recent offshore discoveries will help the situation moving forward, there is work to do. The 2024 gas reserves data was published and has dropped to just 6 years, and there is a shortfall to be covered. Initially, the plan was to look for cheap imports from Venezuela; however, Trump’s hostility towards Caracas and the threat of sanctions for those trading with Nicolás Maduro have complicated the situation. To contextualize the situation in 2012, reserves were above 13 years; however, those at the ANH are hoping that we have now reached the bottom, and that increases due to discoveries will change the trend.

Moody’s was again discussing the fiscal rule, and despite some easing, feels that it won’t be achieved in 2025 due to a shortfall in government revenues. Again, we come back to the global chaos, which has seen oil prices collapse to $60. Gas-guzzling Americans will be ecstatic as the driving season approaches, but it is no help to Colombia.

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Roops.

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Natural gas well. Photo credit: Ken Doerr.

I remain steadfast in believing the election of an alternative to those who did little to improve poverty, failed in education, and oversaw wanton corruption was a good thing – unfortunately, Gustavo Petro failed to learn his lesson as Mayor of Bogotá that you cannot change the world in four years. He over-promised during his election campaign and has disappointed too many people – and there are still 17 months until he hands over the keys to his office.

This week saw the resignation of his third Ministerio de Hacienda Diego Guevara who will be replaced by German Avila – one wonders if the outgoing minister even had time to unpack his boxes – clumsy in the least, damaging confidence and probably impacting the Peso ($4134) which has weakened this week.

Petro declared a public holiday this week so people could protest in favor of his reform process. Numbers were far from biblical, and regardless, they won’t have an impact. He will only harden the attitude in Congress against the reforms, as politicians rail against perceived anti-democratic behavior.

FDI dropped 22% in February to $759 million USD according to Banco de la República – Colombia – again, confidence is being impacted by the perceived lack of political and economic direction.

Domestic demand remains in rude health with imports according to Departamento Administrativo Nacional de Estadística – DANE Colombia rising 8.5% in January with a 15.5% rise in consumer goods. This, as expected, led to a lumpy deficit of $1.28 billion USD as exports remain under pressure.

This is very much in line with the January ISE (economic activity) report, which saw a higher-than-expected rise of 2.65%. So we continue very much in the same vein, the economy moving steadily ahead, but the politicians, who are already positioning themselves for May 2026, are doing their best to derail confidence in the country.

An uninspiring week.

See you all soon.

Roops.

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Photo credit: Gustavo Petro/X.

The big economic headline was Q4 GDP from Departamento Administrativo Nacional de Estadística — DANE Colombia, which was at (2.3%) to the top of expectations, according to Fedesarrollo. That is a 0.6% increase QoQ. The biggest contributions were from commerce/transport (+4.4%), public sector (+4%) and agriculture (+6.5%). The underperformance was from mining which dropped 5.9% driven by weak coal numbers. This brought us to a full-year GDP growth of 1.7%—very much as expected by the same analysts who are predicting 2.6% for 2025 which would be a solid number.

Elsewhere, Ecopetrol announced its latest reserve data. Oil now stands at 7.6 years (little changed) whilst there was a drop to 6.7 years for gas—combining the two there was a marginal increase when compared to 2023. Finally, total production of oil or equivalent rose to 250 million barrels in 2024—the highest in 9 years. The sector is in flux and work needs to be done, but still not the disaster often reported.

More chaos with the pension reform, as the constitutional court received 57 lawsuits against the government. All this does is jam up the court and stop the sector from getting on with life. Amidst all this chaos, the Peso has had a decent week thus far ($4098) and remains one of the best-performing currencies in 2025—albeit off a low base.

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Roops.

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Headline Image Credit: hangela from Pixabay.

Unfortunately, they were likely even more perturbed at what they were watching, amidst yet another cabinet reshuffle and an increasing lack of direction. The 2026 elections are now on the horizon and the political jockeying is under way.

Petro’s 18-month countdown to-do list is littered with impossible and improbable items. Top of that list is ‘Total Peace’ – as events in Catatumbo have demonstrated, it isn’t going to happen. Guerrillas to both the right and left (in fact, do they any longer have an ideology?) are shipping ever more cocaine and are willing to trade body bags to get their way.

In terms of the reform process, it was always going to be a big ask. He should always have stuck with a couple of items, education and the political system being the most important, and tried to hang his legacy on those. He attempted to reform everything and is going to badly underexecute.

The migrant dispute with the US has already passed, and personally, I think there is value to demanding dignity in the face of a bully, others think it was a step too far. That said, the whole of the Colombian economy needs to try and pivot away from the US market.

This week we saw export data from Departamento Administrativo Nacional de Estadística – DANE Colombia for December. There was a 0.6% increase YoY for the month, but the 2024 total was down 0.5%. Commodities dragged whilst coffee and manufactured goods fared better.

Last week we saw January vehicle sales rise 24.3% and now ANDI – Asociación Nacional de Empresarios de Colombia and FENALCO are estimating a full-year increase of 9.4% to 220,000.

We will have January CPI with an expectation of another drop to 5.12% (from 5.20% in December) – this will be a move towards Fedesarrollo‘s YE estimate of 4.18%. Despite a somewhat chaotic picture locally, the Peso had a stable week ($4175) as the fears over a trade dispute with the US eased somewhat.

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Roops.

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Headline Image: Coffee farmer. Photo credit: HunterProducciones from Pixabay.

The rationale or excuse is the uncertain fiscal situation as the authorities struggle to balance the books, and also this week’s developments with the USA. It’s a tough call as the fiscal situation has been a constant for the past year and the fact that the Peso closed Thursday at $4170, its strongest in several months, suggests fears related to Donald Trump, shared by half the world, are overstated.

For the Central Bank, this will be the last meeting before two governors are replaced by Petro’s picks – the February meeting will arguably draw a lot of attention for that reason.

Petro’s perceived belligerence at the beginning of the week when dealing with the treatment of returning Colombian migrants, is now being viewed as a reasonable humanitarian request. It will hopefully embolden other Latam countries to demand the same basic respect from the USA.

November imports from Departamento Administrativo Nacional de Estadística – DANE Colombia rose 13.7% to $5.8bn, more evidence of a recovering economy however with exports still struggling somewhat, the YTD deficit now stands at $9.9bn, higher even than the $9.1bn for the first 11 months of 2023. Exports at least are being helped by coffee, with new record high prices this week.

Catatumbo remains a mess on the Venezuelan border and the government is still struggling to wrangle control back from the ELN and FARC, who are fighting over this lucrative cocaine route.

About it for this Friday, have a wonderful day.

Regards.

Roops.

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Headline Image: Coffee beans from Don Elias finca in Salento, Colombia. (Credit: Jared Wade)

Catatumbo remains an open wound as the ELN and FARC guerrillas fight it out over one of the most lucrative cocaine routes close to the Venezuelan border. Bogotá has now asked Caracas to help with the situation, but as yet there has been no formal reply.

Fedesarrollo released their first analyst survey of 2025 with an expected annual inflation reading of 4.2% (still outside the 2-4% Banco de la República – Colombia target) and an overnight rate of 7% (from the current 9.5%).GDP for 2024 has edged up to 1.8% with 2.6% for 2025.

The Peso, which closed Thursday at $4278 as the dollar, which rallied before the Trump inauguration, now appears to have priced in the ‘Golden Age’ of America.

The weather remains a quandary for IDEAM. At the same time as they were putting 46 municipalities on high alert for rain-related landslides, they were warning another 358 about the risk of drought-related forest fires.

That is all, have a wonderful day.

Regards.

Roops.

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Headline Image: President Gustavo Petro. Photo credit: Archive Presidency of Colombia.