Colombia External Shock

External crisis triggers capital flight and economic disruption, mirroring 2022 dynamics.

Plausibility:

• Venezuelan state failure could trigger massive refugee crisis (2.5M already in Colombia)
• Extreme weather events (El Niño/La Niña) could devastate agricultural output
• Global financial crisis from China property collapse or US recession
• Regional conflict or security deterioration

Rationale:

• Capital flight drives sharp COP depreciation (8%)
• Inflation spikes (7%) from currency pass-through and supply shocks
• Nominal wage growth (7.5%) lags inflation significantly
• Real wage growth stalls (0.5%) as economy contracts
• Unemployment rises but skilled workers somewhat insulated
• Financial stress increases defaults despite employment