OECD: Colombia’s economy to grow by 2.8% in ’25
Colombia’s economy is projected to grow by 1.8 per cent in 2024, up from 0.6 per cent in 2023. The OECD expects growth to reach 2.8 per cent in 2025, driven by policy easing and improved global conditions. However, despite experiencing one of the strongest recoveries from the COVID-19 recession among OECD countries, Colombia is currently facing a slowdown in economic activity.
The latest OECD Economic Survey emphasises that while effective fiscal and monetary policies drove the recovery, Colombia needs a comprehensive reform agenda to ensure long-term growth. Investment remains weak, with Colombia’s growth potential estimated below 3 per cent.
OECD Chief Economist Alvaro Santos Pereira highlighted the need to revitalise investment to boost productivity and unlock the country’s growth potential.
To enhance growth, the Survey advises reducing business informality and regulatory barriers by lowering corporate tax rates, improving access to affordable credit, and creating a stable policy environment. It also recommends expanding simplified tax and insolvency regimes, reducing social security contributions for lower-income workers, and improving skills.
The Survey also stresses the importance of continued fiscal consolidation and adherence to fiscal rules to lower public debt financing costs and ensure sustainability. It advocates for a comprehensive tax reform to rebalance the tax burden, reduce expenditures, and tackle tax evasion.
Additionally, the OECD Survey calls for measures to enhance equality of opportunities, such as expanding child and elderly care services, improving education quality, and reducing informality. Developing transport infrastructure and strengthening fiscal equalisation mechanisms can support regional convergence.
Colombia’s natural resources and renewable energy potential position it to lead in global sustainability efforts. Accelerating renewable energy generation and aligning the carbon tax rate with emissions reduction targets are crucial for building a climate-resilient economy.
Attribution: OECD Economic Surveys COLOMBIA
Subediting: M. S. Salama
