Colombia’s retail sales rose 10.9% year on year in February. This was above the expected 9.8%.
The result indicates stronger than forecast annual growth in retail sales for that month. The report compares February’s sales with the same month a year earlier.
We are seeing that the strong retail sales data for February, coming in at 10.9% year-over-year, confirms that domestic consumer demand in Colombia is more resilient than we initially thought. This upside surprise suggests the economy has strong underlying momentum early in the year. It forces us to reconsider the possibility of a faster-than-expected economic expansion for 2026.
This report will likely put pressure on the Banco de la República to maintain its hawkish stance on interest rates. We have already seen recent March inflation data for 2026 come in at 4.7%, remaining stubbornly above the central bank’s target range. Therefore, derivatives traders should look at positions that benefit from a stronger Colombian Peso, such as buying call options on COP or selling USD/COP futures, as the case for rate cuts weakens.
For the equity market, this is a clear positive signal for the MSCI COLCAP index, particularly for consumer discretionary and financial sector stocks. After a period of uncertainty we saw in late 2025 related to global commodity prices, this domestic strength provides a solid foundation for corporate earnings. We should consider using call spreads on the COLCAP to capitalize on potential upside over the next several weeks.
This consumer strength is causing major banks to update their economic models, with recent consensus forecasts for Colombia’s 2026 GDP growth being revised upward from 2.8% to over 3.1%. This is a significant shift from the more cautious outlook we held throughout much of 2025, which was heavily dependent on export performance. The data implies the domestic economy can offset potential weakness from abroad.
The market is now quickly pricing out the probability of interest rate cuts in the second half of the year. Historically, the central bank has acted decisively when demand-driven inflation appears, as we saw in the 2021-2022 tightening cycle. We believe positioning in short-term interest rate swaps to hedge against the central bank holding rates steady for longer than anticipated could be a prudent move.
