In 2024 the world economy showed resilience, recording growth of 3.2%1.
The reduction in inflation enabled the easing of monetary policy in the main economies, which helped to mitigate the increased cost of living and the effects of uncertainty generated by geopolitical tensions. However, significant differences were observed in the dynamics of economic activity and in the recovery of income between the various economic blocs.
Consumer confidence increased in several regions, although it remained below historical average levels, especially in the more developed economies.
In the last months of the year, retail sales increased more sharply in most economies, and labour market rigidities gradually eased in many countries. Despite the successive increase in household disposable income, private consumption growth remained modest, partly due to rising savings rates.
In the geopolitical sphere, the year was marked by the persistence of the war in Ukraine, as did the escalation of the conflict in the Middle East. The electoral campaign in the United States of America (USA) and Donald Trump’s election as the 47th president of the United States were key events in the second half of the year. The president-elected announced protectionist measures, potentially covering countries with which the USA has trade relations, which created uncertainty about economic growth and inflation in 2025.
The Organisation for Economic Co-operation and Development (OECD) estimates that gross domestic product (GDP) growth should accelerate to around 3.3% in 2025 and 2026. Inflation is expected to continue the downward trajectory that began in late 2023 and stable employment growth, combined with a less restrictive global monetary policy, could help to sustain demand.
In Poland, the year was marked by several economic challenges. In the first quarter, consumers continued to benefit from the reduction in value added tax (VAT) on some essential goods. In the following months, the end of this benefit and the unfreezing of energy tariffs contributed to a deterioration in consumer confidence.
In Portugal, the resignation of the Socialist Party Prime Minister at the end of 2023 triggered snap elections in March 2024, which resulted in the victory, with a relative majority, of the Social Democratic Party. The country’s credit risk improved throughout the year, reflecting a reduction in financing costs for the State, companies and households.
In Colombia, the political scenario remained plagued by intense polarisation. With the President’s difficulty in approving varied reforms throughout the year and, in particular, with the rejection, in December, of his tax reform and the national budget, the differences between the government and the opposition parties intensified, less than a year and a half before the next legislative and presidential elections.
Gross Domestic Product
Last 3 years
The Polish economy accelerated in 2024, with GDP growing by 2.8%, compared with growth of 0.2% in 2023. Both private and public consumption increased in 2024, driven by falling inflation and significant growth in nominal wages, largely boosted by the increased minimum wage. Nevertheless, households remained cautious and increased their savings rate.
Also in Poland, the pace of disbursement of funds from the Recovery and Resilience Plan resulted in slower growth in investment, with industrial production recording a minor increase in 2024.
The Portuguese economy slowed in 2024 and GDP growth is expected to be 1.9%. Despite the progress in implementing the Recovery and Resilience Plan, there was a reduction in business investment and a slowdown in the real estate market. Domestic demand accelerated and exports recorded robust growth. In the labour market, employment increased in 2024, largely due to the growth of the foreign workforce, with the unemployment rate remaining low. Despite the slowdown, the Portuguese economy grew above the European Union average (1%).
In Colombia, the economy grew by 1.7% in 2024 (compared with 0.6% in 2023). Investment regained some momentum and the labour market proved resilient, which supported private consumption and contributed to economic growth. Exports grew more than in 2023, despite the impact of the fall in oil prices.
Consumer Price Index
Last 3 years
Inflation in Poland started 2024 on a downward slide, reaching a low of 2% in March, while government support measures, including zero VAT on essential food products, were still in place. However, with the end of this measure, and the partial removal of the cap on energy prices, inflation has since been on an upward trajectory, having ended the year with a variation of 4.7% in December, compared to the same period of the previous year. Average inflation stood at 3.7% in 2024 (11.4% in 2023).
In Portugal, average inflation was 2.4% in 2024 (4.3% in 2023), with fluctuating behaviour throughout the year. The lowest rate was recorded in August (1.9%), after which it accelerated and reached 3% in December.
In Colombia, inflation stood at 8.3% in January and fell over the year, reaching 5.2% in December. On average, inflation was 6.6% in 2024 (11.7% in 2023). Core inflation, which excludes food and energy products, also fell, reaching an average of 6.6% in 2024, compared to 10% in 2023.
Reference Interest Rate - EoP
Last 3 Years
In 2024, major central banks eased the restrictive nature of monetary policy.
The European Central Bank (ECB) kept its reference interest rates unchanged at 4.5% in the first months of the year, implementing gradual cuts from June onwards. The ECB cut interest rates four times, leading to the refinancing rate closing the year at 3.15%.
In Poland, the Central Bank (NBP) kept the reference interest rates unchanged (5.8%), as it considered a restrictive monetary policy necessary to deal with the still high inflation.
In Colombia, reference interest rates were revised eight times, during the year, amounting to a total decrease of 350 basis points, from 13% to 9.5%, with gradual cuts implemented as the effects of restrictive monetary policy on inflation and core inflation were observed.
Total and Food Retail Sales Indices
Constant Prices
Total sales in the retail sector, at constant prices, improved in 2024 compared to 2023, with positive growth rates in the three economies under review, but lower than the rates recorded in 2022.
In 2024, food retail sales recovered significantly in Portugal, while in Colombia they remained stable and in Poland they contracted slightly compared to the previous year. The poorer performance in these two countries is due to greater restraint in purchases by consumers, who were still affected by inflation, high financing costs and a decrease in confidence, mainly during the first half of the year.
Consumer Confidence Indicator
Last 3 Years
Consumer Confidence Index levels improved in all three countries in 2024, despite remaining in negative territory.
In Poland, the indicator rose steadily during the first four months of the year but then deteriorated as the disinflationary period that had been underway since the previous year ended. In the rest of the year, consumer confidence declined slightly as a result of the partial abolition of price caps on gas and electricity tariffs for households.
In Portugal, consumer confidence recovered in the period from January to September but declined in the last months of the year. Nevertheless, confidence was almost always at less negative levels than those recorded in 2023.
In Colombia, the confidence index in 2024 improved in comparison to the average figures for 2022 and 2023.
Unemployment Rate
Last 3 Years
The evolution of the unemployment rate varied in the countries under review.
In Poland, the average unemployment rate in 2024 stood at 5.1%, in line with previous years.
In Portugal, the average unemployment rate remained virtually unchanged compared to 2023 at 6.4%. The unemployment rate has stayed relatively stable over the past few years, even amidst strong job creation and an increase in the active population.
In Colombia, the unemployment rate has been falling in recent years. This trend continued throughout 2024, reaching 9.1% in December. Nevertheless, at the end of 2024 the country had an average unemployment rate of 10.2%.
Regarding exchange rates, in 2024, the złoty recorded an average annual conversion rate2 of 4.3049 in relation to the euro, corresponding to a 5.3% appreciation compared to the average exchange rate of 4.5336 recorded in 2023.
Coincidentally, the Colombian peso recorded an average annual conversion rate of 4,405 against the euro, reflecting an appreciation, like the złoty, of 5.3% compared to 4,640 in 2023.
Inflation at a worldwide level is expected to decline in 2025, alongside a steady growth of employment and less restrictive global monetary policy. These factors should support demand, despite the necessary tightening of fiscal policy in several countries.
Inflation is expected to return to its medium to long-term target in almost all major economies by late 2025 or early 2026. Central banks are expected to continue to lower interest rates as inflation continues to decline and labour market pressures dissipate.
The institutions’ expectations for 2025 point to an acceleration of economic growth in Poland, driven by rising real wages and a fiscal policy that supports demand.
The Recovery and Resilience Plan is expected to continue to stimulate investment while inflation is expected to gradually slow down. Wage growth is expected to boost consumption, while continuing to exert pressure on companies’ costs, thus posing a risk of rising inflation.
Monetary policy should remain tight, given the inflation risks associated with rising energy prices, excise taxes and regulated services. Nevertheless, policy is expected to ease as price pressures dissipate.
Forecasts for 2025 point to sustained growth of the Portuguese economy, fuelled by domestic and foreign demand. Moderate inflation, together with rising real wages and employment, should sustain household consumption.
The gradual transition to lower interest rates and the Recovery and Resilience Plan funds should have a positive impact on investment in Portugal. External demand for the Portuguese economy is expected to accelerate in 2025, but export growth could be constrained by the strong base effect, particularly in the tourism sector.
In Colombia, a gradual economic recovery is expected in 2025, with private consumption and fixed investment in infrastructure, machinery and housing developing favourably. Exports should grow at a moderate pace, taking into account external demand and the maintenance of oil prices, while investment goods, used to produce other goods or services, are expected to drive greater growth of imports, increasing the current account deficit.
Domestic and international uncertainty could put additional pressure on the exchange rate and interest rate differentials. A possible rise in oil prices, triggered by geopolitical tensions, could boost exports and tax revenues.
Inflation is expected to stand around 3% in 2025, with interest rates trending downwards, which should improve the financial conditions of economic agents.
1 World Economic Outlook Update and Economic Outlook, Volume 2024 Issue 2
2 Average annual conversion rate determined by weighting the turnover of the Group Companies operating in this currency.