The risk of not obtaining the money needed to finance the projected expenses by the Ministry of Finance is one of the strongest fears for economic study centers and analysts, who have stated that it is necessary to cut the amount of the General Budget of the Nation for next year or the fiscal rule will not be met and the country’s borrowing needs could increase.
The possibility that the Dian will not meet its collection goal and that the The slowdown will continue to take its toll on economic dynamics; these are some of the factors that are worrying in the face of the $523 billion proposed by the Government. Even the Autonomous Committee of the Fiscal Rule has said that several expenses of this project are subject to uncertain income that constitutes a threat within the accounts.
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Faced with this, the Minister of Finance, Ricardo Bonilla, has said that there is no waste and that the increase is mainly explained by debt commitments and inflexible amounts in operating items. He also recalled that during the pandemic and subsequent months, the country had to seek credit, a situation that currently has them in a scenario where debts must be managed.
Colombian economy.
iStock
Return the budget
In the midst of this debate, a former Minister of Finance raised his voice and asked Congress to have some common sense and return to the Government the draft General Budget of the Nation for 2025 and not expose Colombia to the same risks that this year already forced $20 billion to be cut from the budget that is being implemented, a situation that is undoubtedly taking its toll on economic growth.
This is Juan Camilo Restrepo, who is also an expert in budgetary issues, and in a forceful message he said that the Casa de Nariño and the Ministry of Finance must come down “from the cosmic cloud of fiscal fantasies in which they find themselves” to prioritize the macroeconomic stability of the Nation.
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“Given the protruding underfunding of the Budget for the year incoming (well over $12 trillion), it makes a lot of sense for Congress (within its powers) to return it to the Government so that it can make the necessary adjustments and a more realistic budget can be approved,” the economist began by saying.
Beyond the possibility of whether or not the money needed will be obtained through a financing law, for the former Finance Minister the most important thing is that the State’s accounts do not depend on projects that for him are inconvenient and might not have the impact that is expected.
Juan Camilo Restrepo, former Minister of Finance of the Pastrana government.
Rodrigo Sepulveda / THE TIME
“The problem is not limited to how to obtain an additional $12 billion in revenue with the new tax reform, the details of which are not yet known even though it should have been presented in July as a financing law that It is from the basic budget project (article 347 of the Constitution),” added this expert.
In this regard, Juan Camilo Restrepo added that “the problem is much deeper, as explained and analyzed very well by the statement of the Autonomous Committee of the Fiscal Rule, which warns that the risk arises from the fact that the income forecast in the Budget Project for 2025 is grossly overestimated.”
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That being the case, he was emphatic that making this cut is an urgent matter, since important elements are at stake, such as compliance with the fiscal rule, not taking the Colombian economy to risk limits and taking care of the image and confidence of investors, especially at times when capital is needed to reactivate the economy.
“If the cuts are not made now, they will end up being made inexorably and in any case during the budget execution of the next year, when it becomes evident that the real income will NOT be able to support the spending plan that is being contemplated for the next year. It is better to correct the 2025 budget in time, rather than having to do it late next year in the face of evidence of plummeting revenues,” he said.
Ricardo Bonilla, Minister of Finance and Public Credit
House of Representatives
It should be noted that within the same Congress the idea of agreeing with the National Government, a possible reduction in expenses in this project, for $12 billion, is being promoted, not only to avoid fiscal risks, but also so that the Financing Law that is also being prepared and that many They have described it as counterproductive given the economic reality of the country.
