After the North American rating agency Fitch Ratings indicated that the projections for Colombia at the end of this year and next are aligned with those of the national government, that is, they are predicts that there will be a fiscal deficit of 5.6% of GDP for 2024 and 5.1% For the other, the former Minister of Finance José Manuel Restrepo referred to it.
Restrepo cited the rating through his X account, where he stated that the management of public finances “It couldn’t be more delicate!! According to Fitch, there are already risks of failing to comply with the fiscal rule and the deficit figure, after three years of decline (after the pandemic), returns and increases and significantly!!!” (sic).
For this reason, the former minister indicated that it is “urgently order the road again!!”. Furthermore, he criticized the expense of the operation of the national government and maintained that some subsidies are unnecessary: “more growth, more reactivation and with it more tax revenue and it is urgent to put an end to so much waste in operating expenses (which grows at 20% annually including payroll increases in equal proportion and fee contracts growing by more than 150% in two years ) and fewer unnecessary subsidies. But above all, more rigor in income forecasts, in reforms, legislative acts and laws that all increase spending without any fiscal control”.
(Also read: This was the management of former Finance Minister Ricardo Bonilla)
In that sense, Restrepo was emphatic that the Government must be very careful with the reforms it advances in Congress of the Republic, due to the consequences they may have: “And be careful with reforms that go against the productive dynamics of the country (labor, tax or health for example) because they end up generating more negative effects”.
It should be noted that according to the rating agency, the Colombia’s credit rating remains BB+ with stable outlookdespite the country’s failure to comply with the Fiscal Rule.
(Also read: The origin of the fiscal challenges that have the country in check)
VALENTINA DELGADILLO ABELLO
Journalist Portfolio
