The latest ISE Economic Activity YoY for Colombia, released on November 18, 2025, registered a 4.03% increase, significantly above the 2.10% consensus and October’s 1.98% reading, according to the Sigmanomics database. This marks the strongest growth in six months, reversing the slowdown observed in mid-2025. The expansion reflects a broad-based recovery across manufacturing, services, and consumption sectors, supported by improving labor market conditions and stable commodity prices.

Drivers this month

• Manufacturing output rose 5.10%, boosted by export orders and domestic demand.
• Retail sales expanded 3.80%, reflecting higher consumer confidence and wage growth.
• Infrastructure investment increased 4.50%, driven by government stimulus programs.

Policy pulse

Monetary policy remains accommodative with the central bank holding the benchmark rate steady at 7.25%, balancing inflation near 4.50% against growth needs. The current economic momentum supports a cautious approach to tightening.

Market lens

Immediate reaction: The Colombian peso (COP/USD) strengthened 0.40% within the first hour post-release, while the COLCAP index gained 1.20%, reflecting investor optimism on growth prospects.

Core macroeconomic indicators underpinning the November ISE reading show a mixed but improving picture. Inflation remains contained at 4.50% YoY, slightly above the central bank’s 3% target but within the tolerance band. Unemployment declined to 9.80%, the lowest since early 2024, supporting household spending. External trade balances improved with a 3.20% rise in exports, led by oil and coffee shipments, while imports grew 2.10%, reflecting sustained investment activity.

Monetary Policy & Financial Conditions

The central bank’s cautious stance reflects persistent inflation risks from food and energy prices, despite recent moderation. Credit growth accelerated to 6.70% YoY, aided by lower lending rates and improved bank liquidity. Real interest rates remain slightly negative, encouraging borrowing and investment.

Fiscal Policy & Government Budget

Fiscal stimulus continues to support growth, with the government increasing infrastructure spending by 7% in 2025. The budget deficit narrowed to 3.80% of GDP, down from 4.50% in 2024, reflecting improved tax collection and controlled current expenditures.

External Shocks & Geopolitical Risks

Global commodity price volatility and regional political tensions pose downside risks. However, Colombia’s diversified export base and trade agreements with the US and EU provide buffers against external shocks.

Sectoral contributions reveal manufacturing and services as primary growth engines, with infrastructure and retail also posting gains. The data align with improved consumer sentiment and stable credit conditions.

Market lens

Immediate reaction: Following the release, the COLCAP index rallied 1.20%, while the COP/USD exchange rate appreciated 0.40%, reflecting market confidence in Colombia’s growth outlook. Short-term bond yields edged higher by 5 basis points, pricing in moderate inflation risks.

Looking ahead, Colombia’s economic trajectory depends on several factors. The baseline scenario projects continued growth near 3.50% YoY over the next two quarters, supported by stable inflation and accommodative monetary policy. Fiscal stimulus and infrastructure projects will sustain demand, while exports benefit from steady commodity prices.

Bullish scenario (25% probability)

• Global commodity prices rise sharply, boosting export revenues.
• Inflation moderates below 4%, allowing rate cuts.
• Private investment surges, lifting growth above 5%.

Base scenario (50% probability)

• Growth stabilizes around 3.50% YoY.
• Inflation remains near 4.50%, prompting steady rates.
• Fiscal policy maintains moderate stimulus.

Bearish scenario (25% probability)

• External shocks depress commodity prices.
• Inflation spikes above 6%, forcing rate hikes.
• Political uncertainty delays reforms, slowing investment.

Risks include geopolitical tensions in Latin America, global trade disruptions, and domestic political challenges. Structural reforms in labor and taxation remain critical for long-term growth sustainability.

The November 2025 ISE Economic Activity YoY reading for Colombia signals a strong economic rebound, exceeding expectations and reversing mid-year softness. The data reflect improving domestic demand, stable inflation, and supportive fiscal and monetary policies. While external and political risks persist, the medium-term outlook remains constructive, contingent on continued policy discipline and global stability.

Investors should monitor inflation trends, fiscal developments, and geopolitical events closely. The COP’s recent strength and equity market gains suggest growing confidence but also heightened sensitivity to policy shifts. Structural reforms will be key to sustaining growth beyond cyclical factors.

Key Markets Likely to React to ISE Economic Activity YoY

Colombia’s ISE Economic Activity YoY is a critical gauge of economic health, influencing multiple asset classes. The following markets historically track this indicator closely, reflecting their sensitivity to Colombia’s growth dynamics and policy environment.

• COLCAP: Colombia’s main equity index, highly correlated with domestic economic activity and investor sentiment.
• COPUSD: The Colombian peso against the US dollar, sensitive to trade balances and capital flows driven by economic performance.
• ECOPETROL: The largest Colombian oil company, its stock price reflects commodity price trends and domestic economic conditions.
• BTCUSD: Bitcoin’s price often moves inversely to emerging market risk sentiment, including Colombia’s macro outlook.
• USDCOP: The inverse of COPUSD, also tracks currency volatility linked to economic data releases.

Insight: ISE Economic Activity YoY vs. COLCAP Index Since 2020

Since 2020, the ISE Economic Activity YoY and the COLCAP index have shown a strong positive correlation of approximately 0.68. Periods of accelerating economic activity, such as late 2023 and mid-2025, coincided with COLCAP rallies exceeding 15%. Conversely, economic slowdowns aligned with market corrections. This relationship underscores the index’s sensitivity to Colombia’s growth prospects and policy shifts, making it a valuable barometer for investors.

Frequently Asked Questions

What is the significance of the ISE Economic Activity YoY for Colombia?

The ISE Economic Activity YoY measures Colombia’s overall economic growth compared to the previous year, indicating the health of key sectors and guiding policy decisions.

How does the latest ISE reading impact Colombia’s monetary policy?

A strong ISE reading like 4.03% suggests robust growth, which may prompt the central bank to consider tightening monetary policy if inflation pressures rise.

What are the main risks to Colombia’s economic outlook?

Risks include external shocks such as commodity price volatility, geopolitical tensions, and domestic political uncertainty that could slow investment and growth.

Final Takeaway: Colombia’s November 2025 ISE Economic Activity YoY reading of 4.03% signals a strong economic rebound, supported by broad-based growth and stable policy conditions. While risks remain, the outlook is cautiously optimistic.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 11/18/25