Colombia macroeconomic monitordata as of 9 Oct 2026
Productive capacity: sectors, labour and regions
Whether the economy produces above or below what it can sustain without generating inflation, and where: by sector, in the labour market and in each department.
Capacity in six measures
- The economy is producing +0.3% above capacity by the median of five methods, but slack is uneven.
- Only 4 of 12 sectors run above trend and unemployment is 0.4 pp below its own. 30 of 33 departments already produce more than in 2019; Cesar, La Guajira, Casanare remain below.
Is the economy producing above or below its capacity?
- In Q2 2026 the economy produced +0.3% relative to its estimated capacity: it is above, with no slack, which tends to push prices up.
?The dotted line is capacity: the most the economy can produce sustainably without creating inflation pressure (like a production possibility frontier that shifts over time). The blue line is what it actually produced. Green: output above capacity (overheating). Orange: below capacity (slack: idle capacity, unemployment). Below, the distance in %.
Learn more
Today the economy produces +0.3% versus its capacity: COP 262 trillion (2015 pesos) in the quarter, against an estimated capacity of COP 261 trillion. Above capacity, firms run at full tilt, labour gets tight and prices tend to rise; below it, there is spare capacity and inflation tends to ease.
Capacity is not observed directly: it is estimated from GDP's trend. It is a guide, not an exact figure; what matters is the direction (whether the gap widens or closes), which is what the cycle clock at the top uses.
Which sectors run above or below capacity?
- Construction is the sector furthest above trend (+1.9%) and Arts, households and other the furthest below (-4.5%).
- When few sectors are stretched, growth can continue without pushing up economy-wide prices; pressure concentrates where the gap is positive.
?Each cell is a sector in a quarter: blue, producing above its trend (no slack); orange, below it (slack). Sectors are ordered by the latest gap.
?Percentage distance between what the sector produces and its trend. Blue: above capacity; orange: slack.
How much slack is there in the labour market?
- Unemployment (seasonally adjusted) is 9.0% and its trend 8.5%.
- The ILO composite measure of labour underutilisation, which adds the unemployed, the time-related underemployed and those who want to work but are not searching, stands at 20.1% of the extended labour force (12-month average), versus 21.3% a year earlier.
?Three ILO measures, from narrowest to broadest: unemployment rate; unemployment plus time-related underemployment; and the composite measure, which adds the potential labour force (available people who are not searching).
?Line: seasonally adjusted unemployment rate, quarterly average. Dotted: its trend (Hodrick-Prescott, excluding 2020–2021). Below trend, the labour market is tight.
Where is the capacity? The regions
- In 2025 the economy grew most in Bogotá (+3.5%) and fell most in Casanare (-2.2%).
- Versus 2019, 30 of 33 departments are larger; the furthest behind are Cesar, La Guajira, Casanare, economies where mining weighs 27% or more.
- Bogotá produces 25% of GDP and its GDP per person is 1.7 times Colombia's.
?Schematic map: each tile is a department, placed roughly where it is. Pick the measure with the buttons. Hover or tap a tile for details.
?Change in each department's real GDP between 2019 and 2025. The dotted line is Colombia.
What does each region live on?
- San Andrés's economy depends 64% on trade and transport; Vaupés's, 53% on gov., educ. and health.
- By the Herfindahl index, the most diversified department is Antioquia (equivalent to 8.8 equal-sized sectors) and the most concentrated San Andrés (2.3): a concentrated region has less room when its main sector slows.
?Each sector's share of the department's value added, at current prices. Darker = larger share. Departments ordered by size.
?Inverse Herfindahl-Hirschman index of sector shares (1/Σs²). With 12 equal sectors it would be 12; the lower it is, the more the region depends on a few sectors.
Methodological basis and literature
- Okun, A. M. (1962). Potential GNP: Its Measurement and Significance. Proceedings of the Business and Economic Statistics Section, ASA.Potential output and the link between output and labour slack.
- OIT (2013). Resolución sobre las estadísticas del trabajo, la ocupación y la subutilización de la fuerza de trabajo. 19.ª CIET.Definitions of underemployment, potential labour force and the composite underutilisation measure.
- Hodrick, R. J. y Prescott, E. C. (1997). Postwar U.S. Business Cycles. Journal of Money, Credit and Banking, 29(1), 1–16.Trend of each sector and of unemployment.
- Hirschman, A. O. (1964). The Paternity of an Index. American Economic Review, 54(5), 761; Herfindahl, O. C. (1950). Concentration in the Steel Industry. Columbia University.Concentration index and equivalent number of sectors.
- DANE. Cuentas nacionales departamentales, base 2015: metodología (CD-01).GDP and value added by department and activity.
Frequently asked questions
Is Colombia's economy above its capacity?
The economy is producing +0.3% above capacity by the median of five methods, but slack is uneven. Only 4 of 12 sectors run above trend and unemployment is 0.4 pp below its own. 30 of 33 departments already produce more than in 2019; Cesar, La Guajira, Casanare remain below.
How is potential GDP estimated?
With statistical methods that separate trend from cycle, such as the real-time Hodrick-Prescott filter and Hamilton's method. Colombia Macro shows five methods and their range.
Why does productive capacity matter?
Producing above capacity tends to push prices up, while producing below it signals unused resources, such as unemployed workers.