2024 has been characterized as a year in which, although the pandemic crisis has already been averted and several sectors of the economy are showing signs of recovery, the need to tighten the belt has been a constant, not only for the National Government, but for the regions and households in general; due to factors such as strict monetary policy, the lack of a recovery plan or the fight against inflation.
As experts say, the country is not in a lean season, but it still doesn’t produce what it needs. This, added to very optimistic tax collection expectations and economic projections, led to a phenomenon that generated concern among analysts during the second and third quarter of the year, since National Treasury Deposits reached their lowest level. the last few years.
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The fact that not all the expected resources from taxes were received and that financing sources such as arbitration and litigation did not materialize, in addition to growing public spending; They were the generators of that cash crisis that hit the Petro government between April and August, even having just over $7.1 billion in the Nation’s accounts.
A slight improvement
To know the current situation of the country’s cash liquidity, Portafolio reviewed the state of the National Treasury’s Remunerated Deposits, finding that as of October 25, this financial record, which basically measures the money that the State has stored in The Banco de la República is at its best point of the year, but below average.
Colombian pesos
Firstly, according to the most updated report from the General Directorate of Public Credit and National Treasury, in September the country closed with $26.5 billion in these deposits, far exceeding the $16.8 billion reached in May, which was its best month. until then and overcoming for the moment that crisis that was observed in the month of April.
However, if you take into account that in September 2023 the depositsitoyes of the treasury reached $44 billion, it is clear that there is a contraction in the resources available to the Nation. Likewise, when taking an average of what the country normally has in its accounts at this point in the game, which is $26.6 billion, it can be seen that they are within normal levels.
Portafolio also consulted the Ministry of Finance to obtain more updated data and from there it was reported that as of October 25, 2024, the balance of Treasury Deposits decreased 23.6% annually to $26.8 trillion, but is still above of the average for the year.
“As it is recalled, at the beginning of May, a value in these deposits close to $3 billion was recorded, which marked minimums for a similar period and set off alarms due to the cash situation of the Ministry of Finance, in a context in which the Tax collection was reduced in nominal terms, which led to revising downward the goal for all of 2024 in more than $31.6 billion, according to the most recent publication of the Medium Term Fiscal Framework,” they explained.
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From the entity, they noted that we must not forget that in the middle of this year a budget postponement of $20 billion was made, with a projection of a future reduction in primary spending of more than $30 billion; strategy that has been important to improve the Government’s cash situation.
“It is worth mentioning that in the accumulated amount for the year as of October 25, the Deposits ofl Treasurereither They reached $26.8 billion (-23.6%), when a year ago the balance was $35.1 billion and a week ago, $26.4 billion. Now, at the end of September, the amount was $26.6 billion, which implies that in just the first 25 days of the tenth month of the year there was an advance of nearly $200 billion,” they reported.
Ministry of Finance and Public Credit
Now, although the balance in general is favorable, if things continue as they are going, the National Government will have no other alternative to tighten its belt even more, since indicators such as tax collection do not improve and projections suggest that it would close the year with a deficit of $11 billion in the best of cases, even with the adjusted goals that Dian has at this time.
Likewise, it must be recognized that Gustavo Petro’s administration has been characterized in 2024 by a low execution of the General Budget of the Nation, a situation that has made it possible to deal with the growing appropriations of resources, which ultimately do not materialize and have led the market to seek to balance the cash flow by under-executing public spending.
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Review accounts
These data are known at a time when the country is getting ready for the debates on the financing law in the Congress of the Republic, a very important project for the PGN 2025 accounts, since if it is not approved, these would have to be cut. accounts for at least $12 billion so as not to violate the Organic Budget Statute.
Saving
All this also generates tension regarding the trust generated by the country to investors. Not in vain, a few days ago the Bank of Bogotá recalled that the risk perception of the local market is not going through a good moment and that this has taken its toll on the economic dynamics and the possibilities of promoting an effective reactivation.
“The greater perception of risk from countries with lower ratings then makes an error in Colombia’s fiscal management more costly today than in the recent past. For now, the market reaction is evident with the country’s CDS deteriorating more than its comparables,” they noted.
For these experts, “it should not be forgotten that a downgrade in the rating would bring higher borrowing costs, not only for the Government, but for all agents, the currency would depreciate and economic conditions would be more challenging.”
