Colombia's External Debt Hits 54.8% Of GDP As Costs Soar

• External debt reached $238.721 billion at the close of November 2025, equivalent to 54.8% of GDP - up 1.6 percentage points from January's 53.2%.
• Roughly 86% of the debt is long-term, and 60% sits with the public sector - a composition that locks in high borrowing costs for years.
• The government faces an unprecedented $130 billion (COP) debt service bill in 2026, with all three major rating agencies now placing Colombia in junk territory.

Every month, a fresh batch of numbers lands on the desk of Colombia's fiscal planners, and every month the picture looks a little worse.

The latest update from the Banco de la República, the country's central bank, shows that external debt reached $238.721 billion at the close of November 2025 - a figure that translates into 54.8% of gross domestic product and represents a $15.792 billion increase since January of the same year.

There was a slight reprieve compared to October, with the monthly balance dipping by $433 million. But the trajectory over 2025 tells an unmistakable story of acceleration.

In January, the debt-to-GDP ratio stood at 53.2%. By November, it had climbed 1.6 percentage points - a seemingly modest jump that, in a $435 billion economy, translates into billions of additional obligations weighing on the country's fiscal capacity.

The composition of the debt reveals why unwinding it will be difficult. Of the total, $204.346 billion - roughly 86% - consists of long-term obligations, while $34.375 billion is short-term.

By sector, the public side accounts for approximately 60%, with $144.546 billion owed by government entities and $94.175 billion by the private sector.

The dominance of long-term public debt means Colombia is locked into high borrowing costs for years, with limited room to refinance on better terms anytime soon.

The broader fiscal context makes the numbers even more uncomfortable. At the end of December 2025, gross government debt reached COP$1.192 trillion - equivalent to 64.7% of projected GDP, the highest level in pesos since records began in 2001, and the second-highest as a share of GDP after the pandemic peak of 65%.

Since President Gustavo Petro took office in August 2022, the total debt has surged by nearly COP$388 trillion, a 48% increase.

As former finance minister José Manuel Restrepo put it, GDP grew by about COP$190 trillion over the same period while debt rose by twice that amount - a dynamic he described as an "explosion of debt" alongside mediocre growth.

The cost of servicing all this borrowing is now a concrete and immediate problem. According to the Ministry of Finance's latest debt profile update, the domestic debt service bill for 2026 will hit a record COP$130 trillion.

Of that, COP$79 trillion represents capital maturities that can theoretically be rolled over through new issuances - but COP$51 trillion consists of interest payments that must come directly from the budget.

With total tax revenue hovering around COP$300 trillion, roughly one in every three pesos the state collects now goes to servicing debt, leaving progressively less for investment, social spending, or infrastructure.

Markets have already priced in their skepticism. All three major rating agencies - S&P, Moody's, and Fitch - downgraded Colombia 's sovereign credit to junk status during 2025, citing the suspension of the fiscal rule, widening deficits, and mounting debt.

Colombia now pays the third-highest interest rate on sovereign bonds among emerging markets, at 6.8% on ten-year dollar-denominated paper - behind only war-torn Ukraine and Argentina.

The Banco de la República compounded the pressure in January 2026 by raising its benchmark interest rate by 100 basis points to 10.25%, a surprise move aimed at containing inflation expectations that had surged above 6% for 2026.

The monthly dip from October to November may offer a momentary talking point for optimists, but the year-long arc is unambiguous. Colombia is borrowing more, paying more to borrow, and running out of fiscal tools to change course.

The next government, whoever inherits the presidency in 2026, will face a debt load that no longer represents a policy challenge - it represents a structural constraint on what the country can do.

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