Colombia’s economy struggled in 2024 with a modest GDP growth of 1.7%, impacted by declines in oil, gas, and mining sectors. Agriculture and entertainment services provided some support, achieving growth rates of 8.1% and 2.3%, respectively. Policy shifts under President Petro to decrease dependence on fossil fuels and a cautious approach by the central bank complicate recovery efforts, although the finance ministry projects a 2.6% growth for next year.
Colombia’s economy faced significant growth challenges in 2024, primarily due to contractions in key sectors such as oil, gas, and coal. According to Bloomberg, the GDP grew by only 1.7%, slightly below analysts’ expectations of 1.8%. Growth in the fourth quarter did improve to 2.3%, driven largely by a strong agricultural sector, which expanded by 8.1%, and the entertainment services sector, which kept pace. Conversely, the oil and mining sectors experienced a decline of 5.2%, and manufacturing dropped by 2.1%.
Policy changes under President Gustavo Petro, who took office in 2022, are also influencing the economic landscape. Petro aims to reduce oil and coal dependency, refraining from issuing new oil exploration licenses despite these resources being major exports. Although there is pressure for the central bank to lower interest rates to boost economic growth, ongoing inflation concerns have resulted in a cautious monetary policy. With new board appointments, there may be a shift towards a more accommodative stance.
Tensions also arose from former U.S. President Donald Trump’s threats of a 25% tariff due to immigration issues that could have hindered Colombia’s economic prospects. Nevertheless, the finance ministry remains optimistic, forecasting a 2.6% economic expansion for the following year.
Colombia’s economic growth in 2024 remains constrained by sector contractions, particularly in oil and mining. However, strong performances in agriculture and entertainment, coupled with a cautious monetary policy under President Petro, could lay the groundwork for increased growth. Despite external pressures, there is cautious optimism from the Colombian finance ministry for the upcoming year.
Original Source: www.indexbox.io
