Fitch: June 21 Runoff Will Shape Colombia’s Fiscal Path

Colombia’s June 21 presidential runoff will have a significant bearing on the country’s economic policies and prospects, Fitch Ratings said in a commentary published this week.

In the first round of voting on May 31, right-wing candidate Abelardo de la Espriella — running under the Defensores de la Patria movement — received 43.7% of votes, defeating leftist senator Iván Cepeda of the governing Pacto Histórico, who received 40.9%. Neither candidate reached the absolute majority required to win outright, sending the election to a runoff.

De la Espriella’s stronger-than-expected first-round performance prompted a positive reaction in financial markets, reflecting expectations that he may be better positioned to address Colombia’s macroeconomic challenges that have intensified under outgoing President Gustavo Petro.

The next president will face the challenge of addressing Colombia’s wide fiscal imbalance. The central government deficit reached 6.4% of GDP in 2025, or 7.8% when net of a temporary reduction in interest costs from liability management operations. Fitch estimates that debt stabilization will require a fiscal adjustment equivalent to 4% of GDP. Higher global oil prices are expected to boost revenues via taxes and dividends in 2027, but Fitch cautioned that this support may not last.

“De la Espriella’s stronger-than-expected first-round performance prompted a positive reaction in financial markets, reflecting expectations that he may be better positioned to address Colombia’s macroeconomic challenges.” — Fitch Ratings

De la Espriella has pledged fiscal consolidation through a 40% reduction in the size of the state, while Cepeda has proposed restraining public-sector salaries and benefits. Budget rigidities and spending pressures tied to pensions, healthcare, and subnational transfers will make either adjustment difficult. Both candidates have also proposed higher spending — on defense and social welfare respectively. Capital spending could be trimmed as an adjustment variable, but only to a limited extent, with 2025 outlays of 2.7% of GDP.

The interest bill will be another source of pressure amid a higher local yield curve. Recent liability management operations have replaced lower-coupon bonds with higher-coupon ones, providing an up-front financial benefit while increasing future interest costs.

Given these spending constraints, durable fiscal consolidation is likely to require revenue-side measures. Colombia has a history of tax reforms, but new legislation is far from assured. De la Espriella has pledged to cut taxes, and while Cepeda supports revenue-raising measures, he could face obstacles in advancing reforms through Congress — as Petro’s administration found.

Uncertainties about Colombia’s trend growth persist. The economy expanded at an annual rate of 2.5% in 2019–2025, below the ‘BB’ median and below its own prior average of 3.5%–4%, supported by government transfers, a strong labor market, and minimum wage increases that kept private consumption buoyant at +4.2%. In contrast, investment contracted by an average of 1.6% annually, falling to 16% of GDP from 21%, affected in part by business concerns about the Petro administration’s more interventionist policy stance.

De la Espriella has pledged to boost growth through promotion of hydrocarbon development — including fracking — alongside tax cuts and steps to reduce administrative burdens on businesses. Cepeda has pledged continuity with Petro’s state-led development model, without concrete proposals to revive private investment.

Both agendas face implementation challenges. The next legislature will remain fragmented, requiring negotiation to pass any major legislation. As a political newcomer, de la Espriella could encounter difficulty advancing his program should he win. Social protests are a risk, particularly regarding his plans to cut spending and adopt a tougher security stance.

The election could also influence monetary policy, with implications for financial conditions and thus for public finances and growth. Despite rising inflation, the Banco de la República (Banrep) voted to hold its policy rate at 11.25% after swift prior increases of 200 basis points, amid explicit pressure from the executive branch for looser policy. The elections could influence Banrep’s next steps starting with its June 30 board meeting, and will also determine who fills two vacancies on its seven-member board in 2029.

Fitch’s downgrade of Colombia to ‘BB’/Stable in December 2025 reflected the agency’s view that the starting point for public finances had weakened considerably, and that improvement would take time regardless of the election outcome. Faster-than-expected fiscal adjustment, higher growth, and lower real rates that support debt stabilization could be positive for the rating. A worsening of these variables that steepens the debt trajectory could be negative.

Above image: Fitch Ratings

The bank’s analysts say that the increase still doesn’t include the effects of Gustavo Petro’s 23% decreed increase in the country’s legal minimum wage.

According to a report by the Economic, Industry & Market Research Area of Bancolombia (BVC: BCOLOMBIA, NYSE: CIB), annual inflation in Colombia rose by 25 basis points to 5.35% in January 2026. This monthly increase of 1.18% represents the highest inflation level since October 2025.

The data, originally prepared by the National Administrative Department of Statistics (DANE), indicates that 70% of the January inflation print was concentrated in the services and regulated components. These two sectors contributed 83 basis points of the total 118-point monthly increase, largely driven by the initial stages of annual cost pass-throughs associated with high indexation.

Businesses should prepare for more intense inflationary pressures in February and March 2026 as the full impact of the minimum wage increase and renegotiated supplier contracts take effect.

Sectoral Impacts and Service Acceleration

Annual inflation in the services category accelerated by 40 basis points to reach 6.33% in January, its highest level since April 2025. The monthly variation of 1.18% in this sector was nearly double the historical January average of 0.63%.

Bancolombia analysts attribute this acceleration to early adjustments linked to the 23% minimum wage increase for 2026 and indexation to previous years’ inflation. Notable increases were observed in:

• Full-service restaurant meals: 3.36%
• Prepared meals consumed outside the home: 2.38%
• Domestic services: 5.16%
• Imputed rent: 0.43%

The regulated group also saw an acceleration, with annual inflation rising to 5.47% from 5.40%. This was primarily explained by adjustments in urban transportation, vehicle fuels, natural gas, and tolls.

Food and Goods Price Momentum

Annual food inflation edged up slightly to 5.10% from 5.06%. Perishable foods saw an acceleration to 4.69% due to seasonal and supply factors affecting products such as tomatoes, potatoes, and plantains. Processed foods, including beef, milk, and poultry, reflected early-year cost pass-throughs, though annual inflation in this sub-group eased to 5.23%.

The goods category reached its highest level since March 2024, at 2.93%. Price hikes in this segment were driven by new taxes on alcoholic beverages enacted under the economic emergency, as well as pharmaceutical products. Conversely, price declines were noted in personal hygiene products, vehicles, and appliances, benefiting from the recent appreciation of the exchange rate.

Monetary Policy Implications and Forecasts

The Central Bank of Colombia (Banco de la República) faces continued challenges in converging toward its 2% to 4% target range. Core inflation, excluding food and regulated items, reached its highest level since November 2024, indicating persistent upward pressure.

Bancolombia forecasts that year-end inflation will reach 6.4%. The analysts suggest that the full impact of the minimum wage increase has not yet been reflected in consumer prices, as many firms are still operating with inventories purchased at previous cost levels.

Consequently, the Central Bank is expected to continue raising its monetary policy rate to anchor inflation expectations. Bancolombia anticipates the policy rate could rise to 11%, noting that the challenging outlook introduces a hawkish bias to future decisions.

Photo courtesy Bancolombia

Musical instruments are far more than tools for producing sound: they embody the cultural identity of a territory, carrying spiritual meanings, collective memory, and the deep-rooted expressions that shape a community’s history. Colombia en un Aliento 2026 (Colombia in a Breath 2026) invites audiences on a sonic journey through the country’s wind instruments, encouraging reflection on how human breath and aerophones have shaped identities, spiritual practices, and spaces of encounter from pre-Hispanic times to the present day.

Conceived as a national cultural project, Colombia en un aliento: instrumentos de viento que narran un país (Wind Instruments That Tell the Story of a Nation) brings together ancestral knowledge, popular traditions, and contemporary artistic creation. Through an interdisciplinary approach, the initiative connects past, present, and future via a wide-ranging cultural program structured around four thematic lines.

El soplo como rito de la vida (Breath as a Rite of Life) explores the symbolic and ritual significance of wind instruments among Indigenous and Afro-Colombian cultures, where blowing air through wood is understood as an act of vitality, spirituality, and connection with the natural world. In these traditions, breath is not merely physical – it is a force that sustains life, memory, and the sacred.

El viento del encuentro (The Wind of Encounter) focuses on the social and communal role of wind instruments in fiestas, carnivals, and collective celebrations. From village plazas to major public gatherings, these instruments create shared rhythms, reinforce bonds of belonging, and transform music into a space for encounter and social cohesion.

Alientos universales, músicas locales (Universal Breaths, Local Music) examines historical processes of cultural exchange, mestizaje, and adaptation. It traces how wind instruments introduced from other parts of the world were reinterpreted across Colombia’s diverse regions, giving rise to musical expressions deeply rooted in local landscapes, histories, and identities.

Respirar el future (Breathing the Future) looks toward contemporary creation techniques, from experimentation with digital technologies to new sonic languages. The section reflects on current artistic practices in which tradition and innovation coexist, opening pathways for composition, teaching, and cultural narratives.

Together, these four thematic pillars support spaces for reflection and research, that strengthen Colombia’s sound identity. From making local knowledge visible and fostering cultural innovation, more than a series, Colombia en un Aliento / Colombia in a Breath proposes a collective experience – an invitation to understand wind instruments as symbols of life, resistance, and social cohesion.

As a year-long project by the Cultural Subdirectorate of the Banco de la República – Central Bank – this initiative will continue in 2027 with a new thematic focus on the human voice as a sonic element, expanding its exploration of sound as a carrier of memory and meaning.

The initiative will be officially launched with the public conversation “El soplo y los instrumentos: sonidos que cuentan historias / Breath and Instruments: Sounds That Tell Stories” on Tuesday, February 3 at 5:00 p.m. in the Audiovisual Hall of the Luis Ángel Arango Library (BLAA) in Bogotá.

The event will feature José Pérez de Arce, Chilean musicologist and leading authority on ancestral aerophones; Humberto Galindo, Colombian researcher and director of the Museo Mundo Sonoro; and Luis Fernando Franco, composer and co-founder of Guana Récords with more than four decades dedicated to musical research and creation.

The conversation will also be streamed live on Banrepcultural’s YouTube channel, opening this shared reflection on breath, sound, and identity to audiences in Colombia and internationally.

For more information visit the cultural page of the Central Bank: https://www.banrepcultural.org/noticias/instrumentos-de-viento-en-colombia-en-un-aliento-2026

Beatriz González, one of Latin America’s most influential contemporary artists, whose boldly colored, deliberately unrefined paintings and installations confronted Colombia’s long history of political violence, public mourning and social inequality – while also reshaping the country’s most important public art collection – died on Jan. 9, 2026, at her home in Bogotá. She was 93.

Her death was announced by the Banco de la República, Colombia’s central bank, where for more than four decades she played a decisive role in shaping the institution’s cultural mission and its vast art collections. In a statement, the bank described her as “an essential figure in Colombian art and culture” and “a masterful narrator of memory.”

González was not only a prolific artist but also a historian, curator, educator and critic — a rare figure who helped define how Colombia would see its art, its past and, ultimately, itself. “Artists exist so that memory is not thrown in the trash,” she once said, a line that came to stand as a quiet manifesto for a career devoted to preserving what official histories often erased.

Born in Bucaramanga in 1932, González came of age during La Violencia, the brutal civil conflict that engulfed Colombia between 1948 and 1958. That formative experience would leave an indelible mark on her work. After briefly studying architecture, she enrolled at the University of the Andes in Bogotá, graduating with a degree in fine arts in 1962. She later studied printmaking in Rotterdam and counted among her teachers the influential critic Marta Traba, who helped shape modern art discourse in Latin America.

González’s early work drew attention for its irreverent treatment of European art history and Colombian popular imagery. Her critical view of “good taste” led her to reject academic refinement in favor of what the art critic Germán Rubiano described as an approach that was consciously unpolished and deliberately opposed to sophistication.

She appropriated masterpieces by Manet, Leonardo da Vinci and Raphael, flattening their compositions and translating them into the visual language of curtains, furniture and household objects. Armoires, beds, trays and even wallpaper became supports for paintings marked by compressed figures and bold color palettes — a strategy that blurred the boundary between high art and domestic life.

One of her earliest and most discussed works, The Sisga Suicides (1965), reimagined a newspaper photograph of a young couple who drowned themselves in a dam outside Bogotá. Rendered in vivid, almost cheerful colors, the painting exposed the uneasy coexistence of tragedy and banality in Colombian public life — a theme that would recur throughout her career.

By the 1980s, González’s art took on an increasingly overt political tone. Press photographs of presidents, massacres and grieving families became central to her work. She painted them repeatedly, transforming news images into objects of repetition and contemplation, as if to ask how a society becomes accustomed to its own suffering. “It’s been a critique of power that has permeated my work,” she told ArtReview in 2016. “For that very reason, I don’t think of it as ‘political’; it has an ethical commitment.”

Her focus on mourning was particularly stark in works depicting mothers weeping after the 1996 Las Delicias massacre, in which dozens of Colombian soldiers were killed by the FARC guerrilla. These images, stripped of sentimentality, confronted viewers with grief as a collective, inescapable condition. The depth with which González addressed both individual and collective mourning stands among her most significant contributions to contemporary art.

That macabre clarity intensified in the 2000s. In Anonymous Auras (2023), one of her final major works, González installed more than 8,000 printed silhouettes of workers carrying corpses across the wall niches of Bogotá’s Central Cemetery. The figures – anonymous, repetitive and almost ritualistic – transformed the cemetery into a monumental archive of loss, honoring victims whose names were never recorded.

“Artists exist so that memory is not thrown in the trash”

Parallel to her artistic production, González exerted extraordinary influence as a curator and cultural policymaker. Beginning in the 1980s, she became a close collaborator of the Banco de la República’s cultural division, serving as a researcher, curator and longtime member of its advisory committee on visual arts. In that role, she helped guide the formation of a national art collection with a distinctly Colombian focus, while insisting on dialogue with international works of the highest quality.

Few individuals knew the Central Bank’s art collection as intimately as González. Over more than forty years, she worked alongside successive generations of curators, historians and collectors, helping to consolidate one of the most important public art collections in Latin America.

In 2020, she donated her personal archive and library — nearly 100,000 documents — to the Banco de la República to ensure free public access. The archive documents not only her artistic practice but also her work as an educator, curator and historian, and provides an unparalleled record of Colombian art, politics and visual culture.

Her institutional impact reached beyond the Central Bank. At the Museo de Arte Moderno de Bogotá (MAMBO), she founded the influential School of Guides, a pioneering program for museum education that trained figures who would later become leading artists and curators. From 1989 to 2004, she served as chief curator of the Museo Nacional de Colombia, where she reorganized the permanent collection and helped redefine the country’s historical narrative through art.

International recognition came steadily. Her work appeared in Documenta 14, the Berlin Biennale and the landmark exhibition “Radical Women: Latin American Art, 1960–1985.” Major retrospectives were held at the Pérez Art Museum Miami, the Museum of Fine Arts, Houston, and the CAPC in Bordeaux. In 2026, the Barbican Centre in London is set to host her first major retrospective in the United Kingdom.

González received numerous honors, including Colombia’s Premio Vida y Obra and honorary doctorates from the University of the Andes and the University of Antioquia. In 2025, the city of Bogotá awarded her the Civil Order of Merit, recognizing her invaluable legacy and profound influence on the nation’s cultural life.

Yet she remained skeptical of accolades. She preferred to speak of discipline, research and responsibility — and of the obligation, as she saw it, to bear witness. From a childhood habit of collecting film-star postcards to a lifetime spent gathering images of state violence, Beatriz González devoted herself to the stubborn preservation of memory and to an unapologetic voice in Colombian contemporary art.

Read the Banco de la República’s tribute (in Spanish) to Beatriz González, written by Claudia Cristancho Camacho of the Cultural Section and Art Collection. 

https://www.banrepcultural.org/noticias/despedimos-la-maestra-beatriz-gonzalez-figura-esencial-del-arte-y-la-cultura-en-colombia