Known the final balance of the fiscal accounts in Colombia, a new debate opened in the country, since while the government argues that it was fulfilled full letter, various analysts and economic study centers criticized the moves it made to be left the limits that the medium -term fiscal framework and They stressed that in the future this could have consequences in the perception of risk.
That said, along with this debate, about whether or not the rule was fulfilled, A new conversation is opening the country, related to the need to even tighten the expense accounts for 2025, since income, mainly from the collection capacity of the DIAN, would be overestimating and the risk of a crisis persists Prosecutor for the current validity, repeating the errors of last year.
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According to the Minister of Finance, Diego Guevara, it is key to understand that a large part of the fall in tax revenues is related to the oil cycle and other sectors and that the nominal fall of $ 18.6 billion compared to 2023 is historical in terms market and ended up generating a storm that required extreme measures to overcome it.
“Beyond the budget and the imbalances projected in the growth forecast (0.6% compared to 1.2% expected), the reality is that tax revenues fell dramatically due to various factors, including advancement in the payment of taxes and the volatility of coal prices. In this context, There are elements that must be considered as unique events that justify certain measures, ”he said.
Economic recession
Check the rule
In the Ministry of Finance they are convinced that the management that is being given to the fiscal situation is correct and that, given the inflexibilities that public spending has, the necessary money is being used to boost economic development, in a context in a context in The one that the pandemic forced many countries to spend more.
“We have worked to maintain fiscal sustainability and send clear signals to the markets. Settings have been made, but limited structural flexibility of spending is also recognized. In this sense, it is essential to understand the logic behind a transaction of only within the fiscal rule, ”he said.
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Based on this, the Minhacienda warned that “if there are no cyclic components, such as oil, that compensate for the drop in income, an adjustment can be justified under the current methodology, provided that it is unpredictable and unprecedented events,” On the table again, the need to review the parameters of the fiscal rule.
“The fiscal rule is a law of the Republic and we comply with it. However, with regard to the transition regime, there was the possibility of advancing its application by 2025 and executing it within 2024. Today, that option is no longer available, which makes it a matter of validity, ”he said.
Diego Guevara, Minister of Finance.
Guevara Camacho stressed that the available legal and technical tools must adapt to the structural changes of the economy, putting as an example that the fall in tax revenues in 2023, close to $ 18.6 billion, and the impact of pandemic have generated significant unbalances that require a more flexible response.
“Although we meet it, there are several elements that deserve a deeper analysis. We have raised a technical discussion because, although our rule considers the oil cycle, it does not contemplate that of coal, which forces us to use exceptional transactions for compliance. They are methodological aspects that must be reviewed, ”said the minister.
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One of the main challenges indicated by this official is the rigidity of certain structural expenses, such as transfers of the General Participation System (SGP) and pensions of teachers and military, putting on the table that they are items that grow by law with the average From the current income of the last four years, they have increased considerably due to the exceptional growth of GDP in 2021, which has generated considerable fiscal pressure.
“Despite these debates, the tax rule of 2024 has been fulfilled. The growth data will be published next Monday and, once disclosed, the news will be that the fiscal rule has been respected, sending A clear message of fiscal sustainability to creditors and other actors of interest, ”he said.
Colombian pesos
During the changes that are generating challenges for the fiscal review of the country, the Minister of Finance said that after the pandemic, new expenses arose that were not contemplated in the original fiscal rule, as is the case of the Price Stabilization Fund for the Price Stabilization of the Price Stabilization to the Fuels (FEPEC), which has represented an expense of more than one point of GDP in 2022, 2023 and 2024.
“Basically, if we do not have cyclic factors such as oil, That was insufficient, we can apply the methodology and analyze which facts are survivors. That is, those extraordinary events that have only occurred once, such as pandemic, which generated unpredictable and unprecedented impacts, ”he explained.
Although it emphasizes that they have fulfilled under the current rules, he asked to reflect on elements such as “when the fiscal rule was designed, no one anticipated that the growth of GDP in 2022 would be 7% and that in 2023 it would fall to 0.3%. In fact, this behavior allowed us at the time to justify a transition regime that, over time, has been diluted. ”
“It is important to give this debate because no fiscal rule is perfect and, over time, requires adjustments to adapt to new realities. Facing 2025, beyond the macroeconomic variables, we must focus on improving collection and consolidating a sustainable fiscal strategy. This will be a key element to guarantee the country’s financial balance and face the challenges of the future, ”he concluded.
