Central Bank of Colombia keeps policy rate at 1.75 % and lifts 2021 growth forecast
Colombia’s central bank left its benchmark interest rate unchanged at 1.75 % while raising its 2021 growth forecast to 6.0 % from 4.6 %.
Source: Central Bank of Colombia · July 24, 2026 at 10:59 PM · AI-assisted report
KUALA LUMPUR, 25 JULY 2026 —
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Colombia’s central bank left its benchmark interest rate unchanged at 1.75 % while raising its 2021 growth forecast to 6.0 % from 4.6 %.
Market Impact
The decision, taken at the March and April meetings of the Junta Directiva, follows a sharper-than-expected rebound in activity after last year’s 6.8 % contraction. January’s partial lockdowns hurt less than projected, the bank said, with mobility, energy demand and retail sales data all pointing to a first-quarter slide of just 0.3 % year-on-year versus the 4.8 % drop forecast in January.
Inflation remained below target. Consumer prices rose 1.51 % in March, while core inflation ex-food and regulated items fell to 0.94 %. The bank still sees ample spare capacity, a weak labour market with unemployment at 14.6 % in February, and inflation staying below the 3 % goal through the forecast horizon.
The bank lifted its 2021 growth range to 3 %-7 % from 2 %-6 %, citing stronger global demand, higher oil prices and bigger public spending under the government’s financing plan. It now expects 2022 growth of 3 %, down from the January estimate of 3.6 %, reflecting a higher base after this year’s upgrade.
The inflation outlook was nudged higher. The bank now sees end-2021 consumer price growth at 3 % and end-2022 at 2.8 %, up from 2.3 % and 2.7 % respectively, mainly because of firmer food and regulated-price pressures. Core inflation ex-food and regulated items is seen at 2.3 % by December 2021, up from 2.1 %.
The bank warned that risks remain skewed to the downside. A third wave of Covid-19 already slowed January’s rebound, and further outbreaks could widen output gaps and delay the closure of spare capacity. Public debt has risen, lifting sovereign risk premia and tightening external financing conditions for emerging markets including Colombia.
Credit conditions stayed supportive. Banks’ lending rates fell in line with policy cuts, though transmission to mortgages lagged. Commercial loan books stabilised above pre-pandemic levels, while household credit has recovered to year-ago highs. Provisioning and bad-loan ratios rose, yet lenders’ solvency stayed well above regulatory floors.
The bank reiterated that its accommodative stance is justified by below-target inflation and persistent economic slack.