Key facts
- Colombia's Congress approved the 2027 spending budget of 634.9 trillion pesos ($206.6 billion) on Monday.
- The budget projects a record fiscal deficit of 9.4% of GDP.
- The government plans to submit a tax reform package called the "Rescue Law" to reduce public spending.
- The "Rescue Law" aims to lower the fiscal deficit to 7.2% of GDP.
- Finance Minister Miguel Gomez stated the budget reflects the current state of the national economy.
- President Abelardo De La Espriella blamed his predecessor for the fiscal deterioration.
Colombia's Congress approved the government's 2027 spending budget of 634.9 trillion pesos ($206.6 billion) on Monday, as the country grapples with a significant worsening of its public finances. The approval comes amid projections that the fiscal deficit will reach a record high next year.
The Senate and lower house passed the bill after incorporating additional funding needs, including those related to a 7.4-magnitude earthquake in August. Finance Minister Miguel Gomez acknowledged that the budget was not ideal but was affordable given the current economic conditions.
The approved budget forecasts a record fiscal deficit of 9.4% of gross domestic product (GDP), which will largely be financed by an increase in public debt. To address this, President Abelardo De La Espriella's administration plans to introduce a tax reform package known as the "Rescue Law." This law aims to curb public spending and reduce the deficit to 7.2% of GDP, aligning with the projection for 2026.
Juan Carlos Ramirez, head of the Independent Committee for Fiscal Rule Management (CARF), had previously warned in late August that approving the budget as proposed would lead to a more critical public finance situation. President De La Espriella, in a speech on Sunday, described the country's fiscal situation as critical and attributed the deterioration to corruption and resource mismanagement by the previous government led by leftist Gustavo Petro, though he offered no evidence for these claims.