Colombia cuts external debt as fiscal deficit concerns grow

Colombia’s Treasury announced that the country has reduced its external debt from 41.8 % of total debt in 2022 to about 24.1 % by May 2026, after fully repaying a Total Return Swap. Net public debt now stands at roughly 57 % of GDP, below medium‑term fiscal projections, and liquidity reached around COP 27 trillion in late May 2026, strengthening the nation’s fiscal resilience.

At the same time, analysts warn that Colombia’s fiscal position remains fragile. The primary fiscal deficit closed at –3.5 % of GDP in 2025, the highest in three decades, driven by rising primary spending while tax revenues stagnated. Independent forecasts expect the primary deficit to stay around –3.7 % of GDP in 2026, well above the government’s target of –2.1 %. The widening gap between official targets and market estimates is raising concerns about the country’s medium‑term fiscal sustainability.