The Ministry of Finance revealed last week the balance of income and expenses for 2024 and since that time has not stopped the debate on whether or not the fiscal rule was actually fulfilled in the past validity, since the Ministry of Finance Defend their calculations with cape and heavy, while some analysis warn that it was not.
The 6.8% fiscal deficit, which Diego Guevara’s technical team managed third highest in 120 years, surpassed only by 2020 and 2021, two years periods marked by a strong economic crisis derived from pandemia.
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Known this balance, now the markets are waiting for the pronouncement of the CARF on it and if this committee will endorse or not the calculations of the Ministry of Finance. However, previous concepts of the Committee foresee that there will be a crash of trains between these two entities, since their visions regarding the discrimination of spending are different.
Transactions of only time
The apple of discord between minhacienda and carf They are the only time transactions, a category that does not count in the primary fiscal balance and in which the government included several elements that for the fiscal rule committee should not go there, since the principle of survival is not met.
These were the non -structural component FEPC 2023 ($ 1.3 billion); the deductibility of coal royalties ($ 2.3 billion); The statement of the State Council ($ 0.6 billion), the non -anticipated fall of the tax collection ($ 25.7 billion) and the effects of the winter emergency ($ 1.9 billion). All together total $ 32 billion.
Economic crisis
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The CARF is expected to issue a concept regarding government calculations, which although it is not binding, since only the endorsement of the National Fiscal Policy (Confis) council is needed and it already has, as the same president says of the committee, Astrid Martínez, is very heard by markets, both local and internationally.
Analyzing this panorama, from the Anif Economic Studies Center, they pointed out that beyond facing positions on whether or not the rule was fulfilled, the really important thing is to understand that it is at stake is the investment confidence and the risk rating, which, bad managed, it could lead to the wheel to handle the debt.
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José Ignacio López, president of ANIF, said that “there will be two versions, one of the Government and another of the Autonomous Committee of fiscal rule. I believe that, ultimately, it is a super -technic discussion of whether there are transactions at once or not ”, which is initially not good, because it generates confusion.
“In our view, I believe that the fiscal rule, as conceived, was not fulfilled, but I think that the most important thing is to transcend that discussion and it is what is the specific plan between 2025 and 2026 of achieving the adjusted tax figures ”He warned.
Economic crisis
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Trains shock
Beyond crying on spilled milk, from Anif they stated that it is little use to stay in discussions on a subject that has already been conjured. Instead, they propose to focus on the adjustments that are needed for 2025, which, For them, they must focus mainly on a spending cut.
“To the extent that we have uncertainties on these issues, whether or not there is compliance with the fiscal rule, Colombian institutionality is clearly eroded. That is why it would be better if it was a more technical discussion and within a context, say, very particular. Because, ultimately, because the fiscal rule serves as a purpose, which is to guarantee the sustainability of public finances, ”said López.
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This analyst closed warning that “if there are discussions about whether it was fulfilled Or it was not fulfilled, investors will probably begin to doubt or will doubt even more, if they already had doubts, about that institutionality and that affects us all. Greater interest rates that we are going to have to pay. ”
The President of Anif also spoke about the approach of Minister Diego Guevara about reviewing the fiscal rule to update some aspects and said that this rule should be understood as a framework that serves as a guide for the economic authorities, so it does not help much open discussions about discussions about This rule.
“The fiscal rule is a framework that allows the government to try to manage spending pressures and resources it has. As a frame, I think it is still very valid, one can have a maybe marginal discussion of changing some things here or there, but I think it does not do much favor to the government to be talking about changing The rules of the game, but to really try to find a fiscal situation that is sustainable, ”he said.
Colombian pesos
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New holes
Finally, referring to the intention of the Ministry of Finance to present a new tax reform, from ANIF they stated that beyond strategies of greater collection or even a tax reform, it is essential that the government lead a national conversation about an austerity plan efficient.
In this regard, they highlighted that this demands to protect social programsbut also reduce spending in bureaucracy and functioning, optimizing the use of public resources without affecting the most vulnerable citizens.
“When you look at the comparison of how spending has expanded in 2023 compared to 2019, it is seen that a good part of the pressure comes by transfers and others, which will be very difficult to cut, but for example we have to among the ministry Of equality and inclusion programs and others, one can have there an expansion of the expenditure of 20 billion pesos, ”he said.
This economist closed by saying that although the country has already covered the debt with Ecopetrol, it currently has other critical fronts such as health, energy and infrastructure and that the accumulation of government pending obligations with these sectors can generate serious financial problems, putting at risk The stability of essential companies for the development of the country.
