Petro’s victory in Colombia will bring challenges, but not radical change

A fragmented Congress and independent institutions will act as a check on Petro’s agenda

Leftist populist Gustavo Petro won Colombia’s presidential election on Sunday, after delivering a surprisingly high turnout in the country’s outer regions. As FrontierView has highlighted before, Petro’s disruptive reform agenda will be largely held in check by a fragmented Congress and the courts, forcing a level of moderation and preventing the transformation of Colombia’s economic model. Nonetheless, expect an elevated level of policy disruptions to the business environment stemming from the partial implementation of Petro’s agenda as well as dampened business and consumer confidence and depreciation of the peso. MNCs should closely examine Petro’s policy agenda and monitor his appointments to key cabinet posts, including the finance ministry, for further signals of moderation or risk.


Petro was the winner in Colombia’s presidential election on Sunday, becoming the first leftist candidate to be elected in the country. While historic, Petro’s vote victory did not deliver a clear mandate for transformative change, as his vote share of 50.4% fell well short of the 54% that President Iván Duque received in 2018. After the election, Petro sought to calm markets by floating some establishment moderates as potential cabinet picks for the finance ministry, including former ministers Alejandro Gaviria and José Antonio Ocampo. As expected, the Colombian peso remained largely stable following the elections, with the exchange rate depreciating by less than 4% at Tuesday’s closing to COP 4,027: US$ 1. Colombia’s stock market saw a more substantial impact, with the largest decline since the pandemic’s onset in 2020, and the oil company Ecopetrol leading losses.

Our View

Despite Petro’s victory, FrontierView continues to forecast above average growth in 2022 of 4.6% YOY, as consumer finances remain strong, and as potentially disruptive actions will likely be delayed by a Petro government finding its footing. However, 2023 remains poised to bring a convergence of challenges for the Colombian economy, including moderating consumer demand, heightened political disruptions, and slowing global and US growth. As a result, we continue to forecast below average growth in Colombia for 2023 of 1.9%. Petro will have a difficult time building a congressional coalition to even partially implement his reform agenda, which will greatly limit his presidency’s disruptive impact. However, this will also present barriers to implementation of needed, pro-business reforms. The Petro government will also be able to take some disruptive unilateral action on tariffs and oil concessions, heightening uncertainty and dampening the outlook for B2B demand and slow rebounding investment levels.

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