In accordance with the alerts that were launched throughout the year, due to the squeezes generated by the overestimations of the tax collection potential and the projection of income that were not met during the period, 2024 closed as a period in which the cash of the National Government did not pass it to nothing good and continues to generate liquidity problems in the Ministry of Finance.
A week ago, Portafolio published several analyses, according to which it was warned that the Minhacienda could have closed last year “scraping the budget pot”, as a consequence of the fiscal squeeze that forced a cut of more than $20 billion at the time, while It is currently projected that another one of at least $30 billion would have to be made, to avoid new shortfalls in public spending.
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There was no money
This week, the Bank of the Republic announced the final balance of the availability of the National Treasury Directorate (DTN) in the Bank of the Republic, between December 27, 2024 and January 3, 2025 and there found that the liquidity of The Nation ended at its lowest level since 2010, although with a slight upward trend.
“On Friday, January 3, the balance of the DTN’s availability in the Bank of the Republic was $4,215.0 billion, which represents an increase of $647.5 billion compared to Friday, December 27, 2024. During the week it maintained an average of $3,804.0 billion, that is, $1,120.1 billion less than the previous week,” the Issuer said in its report.
Colombian peso
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Specifically, for December 31, the State accounts ended at $3.6 billion, a figure that is positioned as the lowest in the last 15 years, being surpassed by the $3.1 billion that was observed for the same date in 2010, when the country was heading towards the crisis that subsequently generated oil prices.
If we take into account that the year began at $6.8 billion, it can be said that these availabilities, which are basically the cash in hand that the country has for its operating and investment expenses, fell by more than 50% throughout the entire year. the year. However, we must forget that in this period levels of up to $14 billion were reached in cash, which rose and fell according to needs.
The mentioned levels are an alert for the market if it is taken into account that they were very close to those observed in the first week of May, when this indicator managed to fall to $2.3 trillion, its lowest point in nearly 20 years. . Normally for those moments, The resources in the State treasury should be in the order of between $6 billion and $14 billion.
Ministry of Finance and Public Credit.
Photo: CEET – Néstor Gómez
Be careful with spending
Given this, José Manuel Restrepo, rector of the EIA University and former Minister of Finance, explained that this reality translates into the need for important spending adjustments from the Executive and increases tension regarding the state of the fiscal rule and its eventual compliance during the last validity.
“There are still very important problems in terms of collection and this resulted in a result of a very low cash level. We continue to have a very high budget with a very low level of tax collection. The big question is whether or not we comply, in 2024, with the fiscal rule and how we comply,” he highlighted.
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On the other hand, Restrepo Abondano noted that “the government is most likely going to have to make a very strong squeeze on cash at the start of the year, which is going to make government execution very difficult,” which is why he suggested paying close attention to the announcements and movements that are promoted from the Casa de Nariño.
This confirms the alerts of the Autonomous Committee of the Fiscal Rule (Carf), which has spoken on several occasions about the low availability of cash during 2024 and has proposed reducing fiscal spending to levels lower than those of 2022. to regain financial stability and overcome current cash limitations.
Economic growth
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According to Carf, a fiscal adjustment of $52 billion, equivalent to 2.9% of GDP, is required to comply with the fiscal rule in the General Budget of the Nation (PGN) 2025. This adjustment responds to the gap between tax collection projected and actual revenues for 2024, which impacts the scheduled revenue base for next year and requires immediate actions to ensure fiscal sustainability.
A notable fragility
Henry Amorocho, professor at the Universidad del Rosario, joined this discussion.who noted that this data reflects significant fragility on the fiscal front, exacerbated by economic growth limited to 0.6% in 2023, which reduced the ability to generate solid tax revenues.
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“This is a partial analysis, because for a thorough review of the cash, it would be necessary to see the official results of the Nation’s general balance and particularly the fiscal closing of the year 2024, which has not yet been released. That front of fiscal closing, which reaches a result that is called the resources of the General Balance of the Nation and that also tells us of course about the entire situation of how the year closed in commitments, in payments, in balances; “It’s going to show us the consolidated tax data,” he said.
Finally, although the fiscal scenario shows challenges, the projected growth of 2% and an increase in consumption during the last quarter could improve revenues, particularly from VAT. However, there is a high probability that the country will resort to issuing TES in 2025 to cover budgetary needs, generating new pressures in the management of public debt.
