Report published June 3, 2026

Colombia Watch: BofA Trip Notes on Election Outlook and Monetary Policy

Bank of America · June 3, 2026

Following a trip to Bogota, BofA reports that market sentiment has turned bullish due to the momentum of conservative presidential candidate Abelardo de la Espriella. However, persistent inflation risks have led the bank to forecast a 100bp rate hike for June.

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Finvaulta summarizes Bank of America's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.The potential presidential victory of Abelardo de la Espriella is driving investor bullishness due to his focus on fiscal consolidation and deregulation.
2.BofA has revised its monetary policy outlook to include a 100bp rate hike in June 2026, driven by inflation risks and El Niño.
3.Colombia's COLCAP index has rallied 8% on election optimism and remains at a significant valuation discount relative to historical levels.

Key takeaways
Summary of trip: focus on politics, with bullish flavor
LatAm elections showing trend towards conservatism
Abelardo's economic plan: fiscal cuts and deregulation
IMF engagement, deregulation, repeal of AFP decree
Independent analysts believe larger adjustment is needed
Risk of inhering a fiscal deficit close to 8% of GDP
Potential picks for Finance Minister under Cepeda
Potential picks for Finance Minister under Abelardo
Restrepo, link with Duque administration and Uribistas
Cepeda implies continuity in government policies
Unlikely to spend political capital on reforming BanRep
Downside risks on investment
Government policy levers in Cepeda scenario
Precedents of financial repression to commercial banks
BanRep will resume hikes, irrespective of election
Adding a 100bp rate hike in June to our scenario
Less fiscal dominance in the board
Economic activity seems to be weakening
Political transition could reignite Colcap rally in Colombia
Ecopetrol could become a candidate for MSCI LatAm Standard Index inclusion

Report data

Exhibit 1: Summary of macroeconomic projections for Colombia

Metric	Estimate	Context
Overall Fiscal Deficit Forecast	7.2 % of GDP	Revised from 6.7% due to unrealistic government budget assumptions.
Monetary Policy Rate Hike	100 bp	New forecast versus previous 'hold' call.
GDP Growth	2.2 % yoy	Down from 2.6% in 2025.