In January 2025, the National Administrative Department of Statistics (DANE), reported a 2.65% rise in Colombia’s Economic Follow-up Index (ISE).
According to local media outlet La Republica, these results mark the seventh successive month of expansion though it is lower than December 2024.
The growth path highlights the success of the public sector which would have become as of 2024, a key engine of the economy.
Sectors with high performance
ISE numbers reflect mixed performance by activity sector. The first sector, including agriculture, cattle, hunting, forestry and fishing, fell by 0.1%.
The slump highlights even deeper problems in the industry, which has shrunk in four of the last twelve months.
Secondary activities, on the other hand, grew marginally by 0.5%, with the manufacturing and construction industries leading the way at 0.5%.
This expansion increased the ISE by 0.2 percentage points, indicating that the industrial landscape is continuing to improve.
The tertiary sector had the most encouraging results, with a healthy 3.9% growth rate. The recovery in public administration services was especially noticeable, with a significant 6.2% gain, adding considerably to the entire economy by 1.3 percentage points, making it the most impacting sector among the nine analyzed.
Expert perspectives on economic trends
César Pabón, Director of Economic Research at Corficolombiana, praised the year’s encouraging start, adding, “Despite the uncertainty, economic activity had a good beginning, propelled by commerce, services, and industry, which moved past two years of contraction.
“However, it is still early to celebrate, and maintaining this momentum will require confidence and certainty. Housing remains a declining sector, generating concerns about medium-term prospects.”, said the expert to La Republica.
Even with these optimistic numbers, analysts have mixed feelings.
They cite underlying problems in some sectors that could act as a brake on continued growth.
As an illustration, the housing market still struggles, which might restrict its recovery in addition to broader economic resilience.
Commerce and real estate: a key driver
The performance of the commerce sector, in particular, was also a strong driver, with a 5.2% variation and 1.1 percentage points to the composition of the economy, another special highlight of the ISE report.
It indicates a good recovery in consumer spending and market activities, which means that consumers are gradually becoming confident again.
Real estate operations also did well, rising by 1.8% and contributing 0.2 percentage points to the ISE.
The performance of these industries points to a potential turning point in Colombia’s economy, as real estate is frequently a leading predictor of broader economic trends.
Forecast and future outlook
According to Luis Fernando Mejía, the Director of Fedesarrollo, there is a cautiously optimistic outlook, stating that the economy in January grew 2.6%, above market estimates for the first trimester (2.3%).
“This goes in line with our 2025 forecast of 2.6%”, he added.
Although this expansion is welcome news, analysts warn that a fuller plan for restoration is necessary to tackle the fundamental economic threats.
The latest stats, however, present a mixed image of recuperation as Colombia negotiates multiple global and internal economic challenges.
These challenges include the recent resignation of Colombia’s Finance Minister who left office on Tuesday after clashes with President Gustavo Petro over budgetary cuts and after lawmakers rejected the labour reform.
This situation is going to require interchange among sectors and the impact of government policy to drive the economy forward.
Stakeholders are on the lookout for discernible trends, as they may be the sign that the early pocket of momentum witnessed in January can translate into months ahead.
In summary, while Colombia’s economy has started the year on a bright note, considerable obstacles remain.
Continued monitoring and planned actions will be required to maintain economic resilience and performance.
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