Colombia Country Risk Rating

Colombia, who is nearing a highly consequential presidential election, continues to face surging guerilla attacks, keeping its overall country risk unchanged at medium. President Gustavo Petro, a former member of another rebel faction, had promised his nation total peace since his election in 2022. Since assuming office, homicides, kidnappings and massacres have escalated, while the decade long internal conflict - having claimed approximately half a million lives – continues to shape the upcoming presidential vote on the 31st May 2026. Political violence remains medium, while tensions build around the presidential election and an outbreak of terrorist attacks has Colombia on edge. Petro in early March had confirmed 27 people were found dead along its shared border with Ecuador, as his Ecuadorean counterpart, Daniel Noboa, confirmed his country had bombed the hideouts of narco-terrorist groups. Colombia’s drug trafficking crisis remains in a critical situation creating friction, in particular, with the U.S. Political interference and legal & regulatory risk both continue to be assessed as medium-high. Early this year, strained relations with the U.S. weighed upon Colombia’s politics, as U.S. President Trump accused President Petro of fueling the movement of cocaine into the U.S. However, a constructive meeting between the two trading partners had eased tensions, as Petro requested Trump to support his aim of capturing international drug traffickers and mediate tensions with Ecuador’s President. Tensions with Ecuador stem from its failure to implement effective security measures along its shared border, while Ecuador threatens Colombia with 100% tariffs following President Petro’s reversal on a similar proposal.

Economically, the IMF projects a 2.3% GDP growth rate in 2026 and 2.5% in 2027. Robust private consumption and a slow improvement in infrastructural and construction investment sustained reasonable growth, although geopolitical tensions have created much uncertainty throughout industries. Oil production, at least in the short run, has absorbed shocks caused by the conflict in the Middle East following a rise in energy prices. In addition to this, Colombia is in discussions with Venezuela over a possible increase in bilateral trade and the potential provision of electricity to western Venezuela. Inflation is expected to remain above the central bank’s 3% target, with the IMF forecasting 5.9% in 2026 and 5.2% in 2027. The inflation picture prompted a 100bps tightening of Colombia’s monetary stance to 11.25%, due to persistently high energy prices. Therefore, the risk of doing business is unchanged at a rating of medium-high. Government debt to GDP is expected to remain elevated, with many debt management operations planned throughout 2026 ahead of the upcoming change in government in August 2026. Already saving USD 5.5 bln in debt service payments in 2025, such operations are aimed at easing fiscal pressures. Sovereign non-payment risk remains medium- high, following the IMF’S government debt forecast of 60.9% of GDP in 2026 and 61.3% in 2027. Exchange transfer’s rating has worsened to medium risk.