Background on Gustavo Petro and His Role
Gustavo Petro, the current President of Colombia, has been actively engaging with the public through social media platforms to voice his concerns about recent economic measures implemented by the Colombian Central Bank, Banco de la República.
Petro’s Criticism of Interest Rate Policy
In a series of posts on X (formerly Twitter), Petro criticized the Banco de la República for not lowering interest rates sufficiently. From January to June 2025, the policy interest rate only decreased by 0.25%, moving from 9.50% in January to 9.25% in June.
Petro argues that maintaining high-interest rates, even as inflation has dropped to 4.82% according to the latest IPC data for the first half of the year, negatively impacts domestic production. However, analysts consider this stance to be positive and prudent.
Si la tasa real de interés es superior al crecimiento real de la economía, la deuda se vuelve insostenible, cada vez se chupa más de la producción nacional, para pararla. https://twitter.com/hashtag/Colombia?src=hash&ref_src=twsrc%5Esearch&f=live
— Gustavo Petro (@GustavoPetro) July 1, 2023
Petro further elaborated on his concerns, stating that high-interest rates make debt unsustainable and lead to excessive borrowing from domestic production. He also criticized the bank’s board for what he perceives as a predatory approach to the economy, rather than one that supports growth.
Petro’s Warning Against Possible Stagflation
In recent posts, Petro has expressed concern about the possibility of stagflation in Colombia’s economy if the central bank does not accelerate the reduction of interest rates. He noted that controlled inflation has fallen below 5% annually, currently at 4.8%, with price increases of only 0.1% this month.
Controlada la inflación en Colombia. Caída por debajo de 5% anual. Quedamos en 4.8% y el incremento de precios de este mes apenas es del 0.1%. Si la Junta Directiva demora más la baja de la tasa de interés real, podemos caer en estanflación.
— Gustavo Petro (@GustavoPetro) July 1, 2023
Key Questions and Answers
- What is Gustavo Petro’s main concern? Petro is worried that the Banco de la República’s reluctance to lower interest rates significantly will hinder domestic production and make debt unsustainable.
- What is stagflation? Stagflation refers to a situation where an economy experiences slow growth and high inflation simultaneously, making it challenging for central banks to implement traditional monetary policies.
- What is the current inflation rate in Colombia? As of June 2025, the inflation rate in Colombia is 4.82%, according to the latest IPC data.
- What has been the interest rate trend from January to June 2025? The policy interest rate decreased by only 0.25% during this period, moving from 9.50% in January to 9.25% in June.
