Colombia Baseline

Current trajectory continues with above-target inflation in a moderately volatile global context.

• Colombia has struggled with above-target inflation since 2021
• Central bank has been raising interest rates to fight inflation but progress remains slow
• Global environment remains uncertain with ongoing geopolitical tensions

Rationale:

• COP depreciation (5%) tracks 5-year historical average
• Inflation (5.5%) remains persistently above the 2-4% target range
• Nominal wage growth (7.1%) typical for inflationary environment
• Real wage growth (1.5%) reflects tight labor markets but inflation pressures
• Employment remains strong for skilled graduates in healthcare/tech/engineering
• Default rates stay moderate as graduates maintain employment