Colombia’s economy has recovered remarkably well from the COVID-19 crisis, and strong fiscal and monetary policy support have averted a stronger contraction of incomes. Solid macroeconomic policy frameworks are laying the grounds for a continuous recovery of domestic demand, although the sustainability of fiscal accounts will require further action. In a longer view, however, both growth and social inclusion are trapped by weak structural policy settings that preclude more than half of income earners from formal jobs and social protection, while preventing firms from growing and becoming more productive. Solving this vicious circle through ambitious reforms would allow a significant leap forward for material well-being in Colombia.