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Bond Market News
Colombia Downgraded to BB- by S&P
April 9, 2026
Colombia was downgraded by a notch to BB- from BB by S&P. The downgrade reflects concerns over limited fiscal flexibility, rising debt burden, a weak external position, and increasingly unpredictable fiscal policy, including the suspension of the fiscal rule. Economic growth is projected at around 2.5% in 2026, supported mainly by consumption, while investment remains subdued due to policy uncertainty and high interest rates. Interest burden remains high, and net general government debt is projected to approach 66% of GDP by 2029. Political uncertainty ahead of the 2026 elections, a fragmented legislature, and limited support for tax reforms are further expected ti complicate fiscal consolidation efforts. Additionally, inflation remains above target, prompting tight monetary policy. Structural challenges such as security concerns, record-level drug production, and an upcoming major transfer of spending authority to subnational governments are set to add further pressure to its ratings.
Colombia’s dollar bonds traded with a positive bias, with its 5.625% 2044s at 80.8, yielding 7.6%.
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