The reasons why JP Morgan does not see Colombia as an attractive country to invest in
The American bank JP Morgan believes that now is not the time to look at Colombia as an investment destination.
“While there has been increased interest in Colombian stocks following the recent rally triggered by the short-lived US tariff threat, we still believe there are no substantial fundamental drivers on the horizon ,” reads a recent report.
Colombian Stock Exchange. Photo: Mauricio Moreno
The entity says that there are local and external risks that must be monitored. At the internal level, it says that Colombia continues to have one of the highest monetary policy rates in the region (9.5 percent) and that fiscal pressures persist.
“A potential medium-term catalyst could emerge with the presidential elections in May 2026, which will become a major market driver. Still, we believe it is premature to position for that at this point,” they say.
On the external side, it is noteworthy that US President Donald Trump may continue to use tariff threats against Gustavo Petro as a negotiating tactic on immigration issues, which could lead to further market volatility.
In addition, he notes that efforts to boost U.S. domestic oil production could result in lower oil prices, which would hurt the currency and tax revenues.
Gustavo Petro and Donald Trump. Photo: Presidency - AFP
Regarding GDP growth for 2025, Colombia is expected to reach 2.5 percent, below Peru (2.7 percent) and above Chile (2.0 percent).
Finally, he says that there are risks that could affect Colombian equities. Specifically, he mentions that the pension reform would lead to a decrease in the dynamism of trading volumes in shares due to the drop in inflows to Pension Fund Administrators (AFP).
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