Foreign direct investment in Colombia cooled further in 2025, with inflows of US$9.16 billion through September marking a 4.8% decline from the same period a year earlier and one of the weakest performances for that nine-month span in the past decade, central bank data showed Wednesday.
The Banco de la Republica reported that investment in the third quarter totaled $2.9 billion, down 12.2% from $3.3 billion in the year-ago quarter, a shortfall of about US$402 million. The second quarter had been stronger, with US$3.2 billion entering the country, up 17.4% from Q2 2024, but that gain did not offset weak flows at the start of the year and the slide in Q3.
“The third quarter’s drop is worrisome because it signals that the recovery in inflows is uneven,” said an analyst who tracks capital flows to El Tiempo. “A lot will depend on policy clarity, macro stability, and investor confidence heading into 2026.”
Colombia’s foreign investment falls 4.8% through September; Q3 drops
Sector breakdowns show the pattern was uneven. The hydrocarbons sector, mainly oil, remained the largest recipient of foreign capital, drawing US $1.9 billion through September, a near 19% increase year over year. Frank Pearl, president of the Asociacion Colombiana de Petroleo, said energy companies have maintained and in some cases stepped up investment to sustain production, citing commitments under existing contracts and enhanced-recovery projects.
“Despite the political signals about limiting exploration, firms are fulfilling capital obligations and moving forward with projects to keep production near 750,000 barrels per day,” Pearl said. He warned, however, that Colombia needs conditions that attract fresh investment and make projects viable to safeguard energy security and fiscal sustainability.
Other traditional recipients cooled. Investment in mines and quarries, which includes coal, dropped 51.7% to US$491 million through September, from over US$1 billion a year earlier, a drop industry officials linked in part to government decisions such as restrictions on coal sales to Israel.
Financial and business services remained the largest single recipient overall, with US$2.3 billion, but that was down about 6.1% from the same period in 2024. Manufacturing drew US$1.5 billion, off 13.3%, and the commerce, hotel, and restaurant sector saw a steep 32.4% decline to $831 million.
Over the decade, the pattern has been volatile. Flows collapsed during the pandemic, US$5.39 billion through September 2020, but then rebounded to US$13.09 billion in 2022 before easing to US$9.62 billion in 2024. The US$9.16 billion through September 2025 places the year among the weaker recent results outside the pandemic era.
Several factors have hindered investment in the country
Economists and market analysts point to both domestic and global headwinds. Higher international interest rates, investor caution, and a more selective global allocation of capital are constraining flows, while domestic factors such as policy uncertainty and questions over legal protections for investors further dampen appetite. “With a third quarter clearly negative and key sectors retreating, recovering lost ground will require macroeconomic stability, robust rules of investment and projects that diversify sources of foreign capital,” the central bank commentary said.
Looking ahead, analysts said Colombia’s ability to attract more foreign capital will depend on clarity over economic policy, judicial and regulatory certainty for projects, and efforts to broaden investment beyond traditional sectors such as hydrocarbons. The government’s stated intent to curtail some oil activity complicates the picture, even as contractual obligations keep capital flowing into existing petroleum projects. “Attracting investment outside oil will be essential to deepen and stabilize inflows,” Pearl said. “That will require credible signals on the rule of law and incentives that make projects bankable.”
The Banco de la Republica data warn that the remainder of 2025, and the opening months of 2026, will be critical if Colombia is to regain momentum in foreign direct investment after a year marked by declines in several key sectors.