Revealed the update of the Financial Plan by 2025, finally the Ministry of Finance uncovered its letters regarding the fulfillment of the fiscal rule and the general balance of income and expenses for validity 2024, with which, although it says it is convinced that it complied with The provisions of the fiscal ruledid not convince analysts and economic study centers.
In talk with the media, Minister Diego Guevara and his technical team said that the economic results of 2024 are positive, and the country returns to a path of sustained growth. He also stressed that thanks to the cut of $ 28.4 billion that was made to the national budget, the management of the cash plan and The adjustment of the transactions only once, the fiscal stability was maintained.
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First, from this portfolio they project that the Colombian economy would have grown 1.8% in 2024, exceeding 0.1 percentage points the projection of the medium -term tax framework of 2024 (MFMP) and being substantially higher than the growth of 2023 (0.6%); while for this year they hope to rebound 2.6% in GDP.
“This fact is explained by the favorable performance of agricultural activitiesartistic and entertainment activities, as well as public administration. In addition, the recovery of the construction of civil works also supports good economic performance. On the expenditure side, solid export growth and fixed investment are evidenced, ”said Guevara Camacho.
Update Financial Plan 2025.
Courtesy – API
The controversial rule
Beyond the adjustment of conservative projections for the gross domestic product and the expected moderation in the fall of inflation, the point that most caught attention in the update of the financial plan was related to the calculations for the fiscal rule, since such And as Portfolio had anticipated, transactions were attended only (TUV) to lower expenses and adjust to the required goals.
“With preliminary information, the deficit of the Central National Government (CNG) in 2024 was 6.8% of GDP, 2.6 percentage points above the data observed in 2023. This result reflects the important fiscal, budgetary and budgetary challenges liquidity faced by the government after an unprecedented fall in the tax collection, which affected the financing of the General Budget of the Nation (PGN) 2024 ”, reported.
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As soon as this calculation was known, various analysts criticized the balance and the fact that they have been included in the TUV category, items that no He recommended the Autonomous Fiscal Rule Committee.
José Ignacio López, president of Anif, indicated that although the government adjusted the data to lower from 6.8% to 5.6% the nation’s deficit, the reality is that in the end the country was well above the projected in June last year in the fiscal framework, since in silver Blanca, the hole was $ 115 billion pesos, $ 20 billion.
Update Financial Plan 2025.
Courtesy – API
“The Colombian government spent another point of GDP (about $ 16 billion) in 2024 of what it had estimated in the medium -term fiscal framework. All this in a year with downward tax revenues. In the Financing Law the Government sought greater debt for $ 5.3 billion (of the $ 12 billion you wanted). It was no more collection. It was more debt to anticipate the transition of the fiscal rule, ”he said.
Meanwhile, Felipe Campos, Investment Manager and Strategy Alliance Securities and Fiduciary, said that “the Government reports that in 2024 the debt went from 53.8% to 60% of GDP. Do not be entangled, the previous government, with the debts of the pandemic and the electoral gift of dollar to US $ 5,000 (which increases the indicator between 3%and 5%), left the debt by 57.7%. ”
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For Germán Machado, Professor of Economics at the University of the Andes, if the minhare winter emergency and fuel fund; The story would be different.
“The Ministry of Finance ended all makeup. To say that it was fulfilled The fiscal rule put $ 32 billion of transactions only, that the CARF has already rejected. Even so, with everything and juggling, the fiscal deficit (6.8% of GDP) is the third worst in history. And without crisis, ”he explained.
Diego Guevara, Minister of Finance
Courtesy – API
A historical deficit
In the historical review of the highest deficits in the last 120 years, Fedesarrollo reported that 2024 will remain as the highest third, exceeded only by 7.8% reached in 2020 and 7% in 2021; two years marked by a strong economic crisis that derived from pandemic.
“The Government says that it complied with the fiscal rule, arguing that the observed drop in income, of about 1.5% of GDP, was transient, so this fall must open an expense space for the calculation of the structural balance . However, that fall is not transient, at least in its entirety, ”he said.
Top five of the highest fiscal deficits in 120 years of Colombia’s history:
1.7.8% of GDP in 2020 (economic crisis).
2. 7.0% of GDP in 2021.
3. 6.8% of GDP in 2024.
4. 6.4% of GDP in 1999 (economic crisis).
5. 5.3% of GDP in 2022.Average deficit in the twentieth century:…
– Luis Fernando Mejía (@Luisfermejia) February 8, 2025
Mejía warned that “collection accounts are being made on an inflated basis, which does not exist. In this sense, from Fedesarrollo we consider that the Government did not comply with the fiscal rule in 2024, and it is very likely that the fiscal rule committee says the same. ”
Finally, for Henry Amorocho, professor at the University of Rosario, With all the above, the country faces two main challenges: recovering the dynamics of the tax collection and reducing the budget lag, which will require a clear and effective fiscal strategy to guarantee a sustainable balance in public finances.
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“The basic problem of the validity of 2025 is that the fiscal balance must that thinking about measures that definitely are noting the improvement of management and fiscal performance, ”he said.
This teacher noted that now the government must tend for a better harmonization between income and expenses, ensuring that resources are assigned and executed more effectively. Likewise, he recalled that the general income balance of 2024, with a cut to December, To determine what so much money was needed in the box last year.
