Colombia Optimistic

Central bank successfully achieves inflation target through consistent policy. Global conditions help as US Federal Reserve cuts rates, reducing pressure on emerging market currencies.

Rationale:

• COP depreciation moderates (3%) as risk sentiment improves
• Inflation (4%) finally enters central bank target range
• Nominal wage growth (6.6%) moderates with inflation expectations
• Real wage growth (2.5%) reflects productivity gains and stable expectations
• Strong labor market for skilled workers continues
• Lower economic volatility reduces financial stress and defaults