S&P Global Ratings downgraded Colombia's sovereign credit rating to BB- (long-term foreign currency) and BB (local currency) with a stable outlook on April 8, 2026, citing persistent fiscal imbalances, higher spending, lower revenues, and suspension of the fiscal rule. The move, following Fitch's downgrade in December, has prompted sharp criticism from business leaders over deteriorating public finances under the Petro government.
S&P Downgrades Colombia's Sovereign Rating
S&P Global Ratings announced the downgrade from BB to BB- in long-term foreign currency and BB+ to BB in local currency, pointing to limited fiscal flexibility, high debt burden, weak external position, moderate GDP growth, higher primary spending, tax revenues below expectations since 2024, high financing costs, and reduced predictability after suspending the fiscal rule. Inflation pressures have led to tighter monetary policy by the independent Banco de la República, supported by a flexible exchange rate.
Business leaders decried the downgrade as a signal of fiscal deterioration. Natalia Gutiérrez, president of the National Business Council, said it deepens speculative status, raising capital costs for households, firms, and the state. Bruce Mac Master, president of Andi, highlighted public debt rising from $800 billion to $1.3 trillion since the Petro government began, with nearly $3 of every $100 in the budget going to interest payments.
María Claudia Lacouture, president of AmCham Colombia, stated: "Without trust and strategy, no new investment arrives." Others, including Anif's José Ignacio López and Fenalco's Jaime Alberto Cabal, warned of TES volatility, higher risk premiums, dollar pressures, and parallels to Turkey. Analysts from Banco Popular and Grupo Cibest foresee public debt devaluation.
S&P warns of further downgrades in 6-18 months if deficits exceed forecasts, amid external outflows. Colombia ranks intermediate speculative, near Brazil and Costa Rica, below Chile and Uruguay.
