Central Bank of Colombia keeps policy rate at 1.75 % and lifts 2021 growth forecast
The technical team at the Central Bank of Colombia lifted the 2021 outlook from 4.8 % in January after the economy shrank 6.8 % last year. First-quarter indicators were stronger than expected despite renewed lockdowns…
Source: Central Bank of Colombia · July 24, 2026 at 10:59 PM · AI-assisted report
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KUALA LUMPUR, 25 JULY 2026 —
The technical team at the Central Bank of Colombia lifted the 2021 outlook from 4.8 % in January after the economy shrank 6.8 % last year. First-quarter indicators were stronger than expected despite renewed lockdowns in January, it said. Inflation has stayed below 2 %, giving policy makers room to hold the benchmark rate at a record low.
Market Impact
The new projection is 1.8 percentage points above the January estimate and exceeds the 5.5 % median forecast in a Bloomberg survey. The bank’s staff still sees “ample” spare capacity through its forecast horizon but now expects the output gap to close more gradually if no new virus waves emerge.
“Excess capacity remains large, yet the recovery has surprised to the upside,” the bank said in the April Monetary Policy Report. It warned that risks remain tilted to the downside, including a potential third pandemic wave and uncertainty over the size of fiscal consolidation.
The technical team expects inflation to accelerate in the second quarter as last year’s price reliefs unwind. Core inflation is still seen below the 3 % target through 2023. The outlook also factors in higher sovereign risk premia after pandemic spending lifted public debt.
Colombia’s 10-year local-currency bond yields fell 3 basis points to 6.05 % after the decision. The peso firmed 0.2 % to 3,680 per dollar. Traders will watch next month’s inflation print due June 5 for signs price pressures are building faster than expected.