Colombia is facing a critical business challenge with a surge in company bankruptcies set to reach a decade-high this year. President Gustavo Petro is under pressure to revive the stagnant economy, caused in part by a downturn in the construction industry due to government reforms.
By late September, 1,230 companies had filed for insolvency, a trend likely to surpass last year’s numbers. Housing subsidies were reformed to prioritize poor and rural regions over cities, leading to a decline in construction, job loss, and reduced demand for materials.
With a significant impact on the housing market, sales have dropped, and numerous projects canceled. Job losses in construction and manufacturing sectors have led to further economic strain.
Colombia’s Housing Crisis
As Petro’s government plans to cut spending, including housing subsidies, the challenges may worsen. However, distressed assets in various sectors are attracting investor interest.
Amidst economic struggles, the collaboration between the government and private sector is essential to revitalize the construction industry and boost overall growth. Despite the current difficulties, there are opportunities for recovery and development in Colombia’s business landscape.