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Followers of monetary policy and inflation are familiar with the decisions made by the Board of Directors of Banco de la República regarding the monetary policy interest rate (MPR), which experiences periods of increase and decrease, always aiming to keep inflation around its 3.0% target. This rate…
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Monetary policy decisions require taking into account the multiplicity of factors that affect price levels and their increase, considering that the interest rate can only influence some of them. Likewise, such decisions must also contemplate the time horizon in which the benefits for society are to…
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Labor regulation protects workers, but it also imposes costs on employers. There is evidence that such costs may cause informality and unemployment, as they hinder the hiring of formal employees and the formalization of self-employed workers.
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A health system reform is currently being discussed which proposes that payment to Healthcare Service Providers (IPS in Spanish) be made directly by a public entity, the Administrator of Resources of the General System of Social Security in Health (ADRES in Spanish), based on fee schedules per…
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As usual, we devote the last Blog of the year to provide a preliminary assessment of the performance of the Colombian economy over the year about to end, as well as to examine its outlook.
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The Colombian peso has exhibited a volatile behavior and a significant depreciation in recent months. In view of this trend, the question arises as to whether an intervention by Banco de la República (the Central Bank of Colombia) in the foreign exchange market to stabilize the currency would be…
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Education is the fundamental mechanism for accumulating human capital that allows social mobility across generations, overcoming poverty, and mitigating inequality. However, in Colombia, as in other developing countries, access to quality education has historically been unequal, mainly affecting…
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Banco de la República’s policy interest rate is currently 9.25%. The policy interest rate serves as the benchmark that the Bank uses to lend to or borrow from commercial banks over very short terms. As with other central banks worldwide, it is the main policy instrument used to achieve the annual…
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Population aging poses a serious challenge to the Colombian pension system.
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Among the sources of external financing of the Colombian economy, in addition to foreign direct investment (FDI), the country also receives other significant resources known as portfolio flows. These flows are a major source of financing for the Government and for private companies. Portfolio…
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The Colombian economy has been increasing its growth pace over the past quarters in response to the strengthening of domestic demand, which expanded by 4.3% annually in the first half of 2025, more than double its growth in 2024 (2.0%). The rise in domestic demand has been driven by the notable…
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The relationship between the management of public finances and the business cycle has been of great interest in economic research. Studies on the subject coincide in pointing out that industrialized countries are characterized by a counter-cyclical fiscal policy, while emerging countries are…
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Recently, the National Administrative Department of Statistics (DANE in Spanish) published updated vital statistics data for the country, exhibiting a 14.6% decrease in births during the first four months of 2024 compared to the same months in 2023. This decline is more pronounced than the 11%…
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In recent years, remittance inflows from workers to Colombia have been increasing at rates that exceed the figures for economic activity growth. As a result, their share of GDP reached an all-time high of 2.8% in 2024, up from just 1.1% a decade ago.
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Remittance inflows are mainly flows of foreign currency sent periodically by emigrants to their families in the country of origin for various purposes such as contributing to household support, children's education, the purchase of housing or other investments that generate capital income for the…
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The Balance of payments of Colombia for 2024 and 2025 shows that between these two years, the current account deficit as a share of GDP (Gross Domestic Product) rose from 1.7% to 2.4%, equivalent to an increase of USD 3,871 million (m) in absolute terms.
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Whenever the monetary authority meets to make interest rate decisions, two key questions need to be answered: Where is the economy at? and Where is the economy headed? Answering these questions is no easy task. On the one hand, the lag in statistical information makes it difficult to have a…
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Socio-economic strata are categories assigned to subdivisions of Colombian cities according to housing and environmental characteristics. They were established in 1994 to aid to cross-subsidize the price of utilities. At the time, they were considered an effective targeting alternative due to their…
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In 2021, the price of beef grew about 31% and, as of February 2022, has seen an additional growth of more than 4.0%. As can be seen from Graph 1, this increase coincided with similar increases in chicken and pork prices up to October 2021 in contrast to the relative stability seen since 2017.…
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In recent discussions about Colombia’s macroeconomic environment, the weakening relationship between Banco de la República’s (the Central Bank of Colombia) monetary policy rate (MPR, or the benchmark policy rate) and market interest rates has received comparatively little attention. Indeed, in…
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Although Colombia’s unemployment rate (UR) has declined in recent years, it remains high in the international context. The most recent Labor Market Report from Banco de la República (the Central Bank of Colombia) includes a comparative analysis of Colombia’s unemployment rate and those of other…
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In 2014, Decree 2616 introduced a change in regulation that lowered payroll taxes for low-income, part-time workers in Colombia. The reform made the mandatory contributions to social security proportional to the time worked when the monthly wage was lower than the minimum wage.
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Over the past decades, Colombian women have experienced profound transformations in their lives in terms of access to higher education, participation in the labor market, and reproductive decisions. However, these advances have not been fully translated into equivalent reorganization within…
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Inflation is the generalized and sustained increase in the prices of goods and services. When inflation is high, money loses its value rapidly, which affects all sectors of the economy, especially households, as their purchasing power declines. This means that with the same amount of money, a…
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As a complement to the Blog published on 07 November 2023, this new entry continues with the review of the Technical Remarks prepared by two members of the Board of Directors of Banco de la República (the Central Bank of Colombia) (only in Spanish) —Bibiana Taboada and Mauricio Villamizar.
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