The Autonomous Committee of the Fiscal Rule (CARF) presented its first assessments regarding the update of the 2025 financial plan, making special emphasis on the need to take structural measures to guarantee the stability of public finances and the sustainability of the debt.
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According to the CARF, compliance with The fiscal rule would require actions to increase income or reduce expenses For at least $ 46 billion. That is, 2.6% of the gross domestic product (GDP).
The entity also issued a warning regarding a series of risks that could be translated into a fiscal burden close to $ 28.5 billion (1.6% of GDP). These include the excess of committed spending, but postponed from 2024 to 2025, and the effects of the increase in the minimum wage.
In the same way, he said that, based on government projections, this year Colombia would complete six consecutive years with deficits greater than 4% of GDP.
The above takes into consideration the scenario presented by the Ministry of Finance in the Financial Plan, which projected a 5.1% deficit of GDP and a debt of 60.6% of GDP, which does not yet converge to the fiscal anchor 55% of GDP.
Fiscal rule
Bank of the Republic
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Collection goal
In its pronouncement, the CARF also indicated that it considers that the executive’s collection goal by 2025, which amounts to the $ 299.9 billion, is enhanced. In counterpart, The projections of the entity in terms of tax revenues are lower than $ 34 billion.
In addition, he considers that the postponement decree issued in January for $ 12 billion will only have a fiscal impact when it materializes as a reduction of expenses.
All of the above, according to the committee, highlights the urgency that the National Government implements structural measures, in income and expenses, oriented to stabilize public finances and to the sustained fulfillment of the fiscal rule.
“The growing burden of interest payment, low economic growth and inflexibility of public spending require a determined management to ensure the convergence of debt to anchor (55% of GDP) in the medium term,” The carf explained.
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