Skandia warns that Colombia’s macroeconomic environment in 2026 will be driven by persistently high interest rates and soaring public debt, forcing businesses, investors, and households to navigate a constrained financial landscape.
Skandia’s recent presentation at Financial Talks: Perspectivas económicas 2026 warned that Colombia’s macroeconomic course this year will be shaped by persistently high interest rates and a large fiscal shortfall, a combination that tightens financing conditions and leaves little room for manoeuvre.
According to Skandia, the descent of inflation from multi‑year highs has been slow, prompting a cautious monetary stance that keeps borrowing costs in double digits and sustains pressure on investment, consumption and corporate financing. “El 2026 se perfila como un año que exige una lectura especialmente técnica del entorno macroeconómico. La combinación de tasas de interés elevadas, un ajuste inflacionario más gradual y los retos fiscales del país obliga a que empresas, inversionistas y hogares tomen decisiones financieras más informadas y estratégicas”, señaló Catalina Tobón, jefe de Estrategia de Inversión de Skandia.
The fiscal picture reinforces those concerns. Central bank reporting and independent analysts show the public finances deteriorating sharply since 2023. Colombia’s general government and central administration deficits widened materially: official central bank data recorded a jump in the general government shortfall and flagged central government net debt moving towards levels well above pre‑pandemic norms. Projections in official medium‑term frameworks and independent forecasts point to total central government deficits in the mid‑to‑high single digits of GDP for 2025–26 unless substantial revenue measures are enacted, with net public debt potentially reaching record highs by 2026.
Market commentators and international institutions echo the risk of rising funding costs. Scotiabank noted a marked upward revision in fiscal deficit projections for 2025–26 driven by higher primary spending and an assumption that a sizeable revenue package will be required to deliver adjustment. The IMF, in its 2025 Article IV consultation, highlighted that widening deficits and heavier debt burdens have contributed to elevated sovereign spreads and weaker private investment, even as growth shows modest improvement and inflation edges down only gradually.
The cost of servicing external obligations has compounded fiscal stress. Reporting from local financial outlets indicates Colombia faces some of the highest interest rates on dollar‑denominated sovereign debt among emerging markets, amplifying interest payments that now consume a large share of tax receipts. That squeeze reduces fiscal flexibility for social programmes and capital spending and has prompted warnings from fiscal oversight bodies about the limits on policy options.
Policy responses are shaping expectations. Authorities have activated fiscal escape clauses and signalled efforts to shore up revenues and contain spending growth, but much of the projected improvement hinges on the timely passage and effective implementation of tax reforms. Analysts caution that failure to restore credibility on the fiscal front could drive risk premia and market rates higher, forcing a more painful adjustment later.
For businesses, investors and households the implications are clear: a prolonged period of higher real rates and constrained public finances will require more deliberate risk management and longer‑term planning. The interplay of a gradual disinflation path, persistent geopolitical and global value‑chain frictions, and an elevated fiscal trajectory means Colombia enters 2026 with limited policy room and heightened sensitivity to international financial conditions.
- https://www.periodicolacampana.com/el-binomio-tasas-de-interes-y-deficit-fiscal-marca-el-pulso-de-la-economia-colombiana-en-2026/ – Please view link – unable to able to access data
- https://www.banrep.gov.co/en/publications-research/report-board-directors-congress/february-2025 – In February 2025, Colombia’s central bank reported that the general government deficit reached 4.8% of GDP in 2024, a 2.1 percentage-point increase from 2023. This deterioration was mainly driven by a worsening in the balances of the Central National Government (CNG) and the Social Security subsector, partially offset by an improvement in Regional and Local Government balances. The net debt of the Central Government increased to 60% of GDP, exceeding previous forecasts. For 2025, a total and primary deficit of 5.1% and 0.2% of GDP is projected, with tax revenue expected to grow by 22.6%. Compliance with the fiscal rule and the stabilization of public finances will be critical in 2025, given the potential impact of fiscal slippage on the country’s risk premiums. Failure to meet fiscal targets could raise interest rates for both the Government and the broader economy. Maintaining credibility in fiscal policy will be key to preventing macroeconomic adjustments from exerting additional pressure on interest rates.
- https://www.banrep.gov.co/en/node/64876/printable/print – In July 2025, the Board of Directors of Colombia’s central bank reported that the Central National Government’s total and primary deficit was 6.7% and 2.4% of GDP, respectively, due to a decline in total revenues caused by lower income tax collection, external VAT plus tariffs, and dividends paid by Ecopetrol, while spending increased due to the General Participation System (GSP), social security (health and pensions), interest, and personnel. According to the most recent Medium-Term Fiscal Framework, the CNG’s deficit is projected to reach 7.1% of GDP in 2025 due to a higher interest burden and a stable primary deficit of 2.4%, as well as a fiscal deficit of 6.2% for 2026, mainly supported by an annual increase in tax revenues that will largely depend on the approval and implementation of a tax reform. The CNG’s net debt would rise from 53.4% of GDP in 2023 to an all-time high of 63.0% in 2026, prompting the Supreme Council for Fiscal Policy (CONFIS in Spanish) to invoke the escape clause of the fiscal rule that allows a temporary deviation from compliance with the fiscal targets set in the fiscal rule between 2025 and 2027. At the end of the escape clause activation period, the total deficit of the CNG is expected to reach 3.1% of GDP in 2028 and 2.8% of GDP on average between 2029 and 2036.
- https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.latam-insights.latam-insights–june-16–2025-.html – In June 2025, Scotiabank’s Latin America Insights reported that Colombia’s projected fiscal deficit for 2025 was revised up from 5.1% to 7.1% of GDP, marking the largest fiscal deficit since comparable data has been available (1994), excluding the pandemic. This deterioration was explained by a 0.8 percentage-point increase in primary spending, which pushed the primary deficit from 0.2% of GDP to 2.4% of GDP. For 2026, the deficit estimate rose from 4.3% of GDP to 6.2% of GDP. This increase is due to higher primary spending, which widened the projected primary deficit to 1.4% of GDP. Notably, much of the anticipated fiscal adjustment between 2025 and 2026 relies on an expected COP 41 trillion (2.1% of GDP) increase in revenues, which will depend on the approval of a tax reform later this year.
- https://colombiaone.com/2026/01/21/colombia-debt-dollar/ – In January 2026, ColombiaOne reported that Colombia pays the third-highest interest on dollar debt, trailing only Ukraine and Argentina. This financial pressure comes as the country’s total debt has surged by nearly 50% under the administration of President Gustavo Petro. Between July 2022 and November 2025, the debt load rose from 789 trillion pesos to 1,176 trillion pesos. As a result, almost one-third of the nation’s tax revenue now goes solely to paying interest on this debt, reducing the budget available for social spending and investment. The Autonomous Fiscal Rule Committee (Carf) has repeatedly warned that these obligations limit the government’s ability to fund public policies. In the 2025 Medium-Term Fiscal Framework, it was estimated that the country would spend around 86 trillion pesos (US$23,432,936,000) on interest payments last year, equivalent to 4.7% of its Gross Domestic Product (GDP), which is one of the highest levels in history.
- https://www.imf.org/en/News/Articles/2025/09/30/pr25320-imf-executive-board-concludes-2025-article-iv-consultation-with-colombia – In September 2025, the International Monetary Fund (IMF) concluded its Article IV consultation with Colombia, noting that the country enters a pre-electoral year amid a mixed economic backdrop. Growth has strengthened somewhat, while inflation is gradually easing, aided by appropriately tight monetary policy. Reserves have remained adequate. A widening fiscal deficit and rising debt levels have led to elevated sovereign spreads, and private investment remains weak amid policy uncertainties. Growth is projected to reach around 2½ percent in 2025 and moderate somewhat over the coming years. Inflation is expected to ease gradually to about 4½ percent by end-2025 and reach the 3 percent target by early 2027.
- https://elpais.com/america-colombia/2025-12-02/el-deficit-fiscal-de-colombia-se-acerca-a-un-record-mientras-petro-advierte-del-riesgo-de-default.html – In December 2025, El País reported that Colombia faces a severe fiscal crisis, with a deficit that increased from 4.2% of GDP in 2023 to 6.7% in 2024, and could reach 8% in 2026 without reforms. State spending surged to 24% of GDP while revenues stagnated. President Gustavo Petro’s government has warned of the risk of ‘default’ if a tax reform, stalled in Congress, is not approved. Public debt reached 65% of GDP and could rise to 70% in 2028, a level considered unsustainable, while average interest rates are 11.2%, draining a third of collected taxes. Experts like Marcela Eslava and Juan Carlos Echeverry warn of the urgent need for structural reforms, including adjustments to mandatory spending and pension reforms. The IMF and Fedesarrollo have recommended immediate cuts and broadening the fiscal base. Meanwhile, the Ministry of Finance is attempting financial maneuvers to reduce costs, though some consider them risky. It is estimated that the country needs between 4 and 6 years of deep adjustments to recover fiscal stability.
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The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The article presents recent analyses of Colombia’s economic situation, including high interest rates and fiscal deficits. However, similar information has been reported in various sources over the past few months, indicating that the narrative may not be entirely original. ([elpais.com](https://elpais.com/america-colombia/2025-12-02/el-deficit-fiscal-de-colombia-se-acerca-a-un-record-mientras-petro-advierte-del-riesgo-de-default.html?utm_source=openai))
Quotes check
Score:
6
Notes:
The article includes a direct quote from Catalina Tobón, head of Investment Strategy at Skandia. However, this quote cannot be independently verified through available online sources, raising concerns about its authenticity. ([elpais.com](https://elpais.com/america-colombia/2025-12-02/el-deficit-fiscal-de-colombia-se-acerca-a-un-record-mientras-petro-advierte-del-riesgo-de-default.html?utm_source=openai))
Source reliability
Score:
5
Notes:
The article originates from Periodico La Campana, a publication that does not have a significant online presence or established reputation, which may affect the reliability of the information presented.
Plausability check
Score:
8
Notes:
The claims regarding Colombia’s high interest rates and fiscal deficits are consistent with reports from other reputable sources. However, the lack of independent verification for some statements reduces the overall credibility. ([elpais.com](https://elpais.com/america-colombia/2025-12-02/el-deficit-fiscal-de-colombia-se-acerca-a-un-record-mientras-petro-advierte-del-riesgo-de-default.html?utm_source=openai))
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information on Colombia’s economic challenges in 2026, including high interest rates and fiscal deficits. However, the lack of independent verification for key statements, reliance on a less reputable source, and the presence of unverifiable quotes significantly undermine its credibility. ([elpais.com](https://elpais.com/america-colombia/2025-12-02/el-deficit-fiscal-de-colombia-se-acerca-a-un-record-mientras-petro-advierte-del-riesgo-de-default.html?utm_source=openai))