Latest news with #GermanAvila
Yahoo
16-07-2025
- Business
- Yahoo
Colombia government weighs tax hikes to fund 2026 budget
BOGOTA (Reuters) -Colombia's government is weighing a tax reform proposal that, if passed, would help raise 26 trillion pesos ($6.48 billion) to fund its 2026 budget, two government sources told Reuters on Wednesday. Most of the funds would be raised through tax increases, the sources said. The proposed amount is higher than the 19 trillion pesos announced in June by Finance Minister German Avila during the presentation of the government's medium-term fiscal framework. A drop in tax income has caused Colombia's public finances to weaken, prompting the government of Latin America's fourth-largest economy to suspend the country's fiscal rule. The Finance Ministry has raised this year's fiscal deficit target to 7.1% of GDP, compared to the earlier target of 5.1%. For 2026, the deficit is projected at 6.2% of GDP. According to preliminary figures presented by Avila on Tuesday night at a cabinet meeting, the government will propose a 2026 spending budget of 551.66 trillion pesos to Congress, which is 7.9% higher than the 2025 budget of 511 trillion pesos. Fiscal challenges led ratings agencies S&P and Moody's to downgrade Colombia's sovereign debt by one notch in June, citing the country's weaker fiscal performance. ($1 = 4,015.04 Colombian pesos) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
16-07-2025
- Business
- Reuters
Colombia government weighs tax hikes to fund 2026 budget
BOGOTA, July 16 (Reuters) - Colombia's government is weighing a tax reform proposal that, if passed, would help raise 26 trillion pesos ($6.48 billion) to fund its 2026 budget, two government sources told Reuters on Wednesday. Most of the funds would be raised through tax increases, the sources said. The proposed amount is higher than the 19 trillion pesos announced in June by Finance Minister German Avila during the presentation of the government's medium-term fiscal framework. A drop in tax income has caused Colombia's public finances to weaken, prompting the government of Latin America's fourth-largest economy to suspend the country's fiscal rule. The Finance Ministry has raised this year's fiscal deficit target to 7.1% of GDP, compared to the earlier target of 5.1%. For 2026, the deficit is projected at 6.2% of GDP. According to preliminary figures presented by Avila on Tuesday night at a cabinet meeting, the government will propose a 2026 spending budget of 551.66 trillion pesos to Congress, which is 7.9% higher than the 2025 budget of 511 trillion pesos. Fiscal challenges led ratings agencies S&P and Moody's to downgrade Colombia's sovereign debt by one notch in June, citing the country's weaker fiscal performance. ($1 = 4,015.04 Colombian pesos)
Bloomberg
13-06-2025
- Business
- Bloomberg
Colombia Activates ‘Escape Clause' to Rule That Curbed Debt
Colombia activated an 'escape clause' to suspend borrowing limits and allow the government to run higher fiscal deficits. During his presentation of the nation's fiscal plan, Finance Minister German Avila told reporters that not to have taken this move would have endangered macroeconomic stability.
Bloomberg
13-06-2025
- Business
- Bloomberg
Colombia Suspends Fiscal Rule That Curbed Government Deficits
Colombia will activate the so-called escape clause that suspends its fiscal rule, Finance Minister German Avila told reporters in Bogota. The rule was introduced by a law in 2011 and limited the government's ability to run up debt.
Yahoo
10-06-2025
- Business
- Yahoo
Colombia to suspend fiscal rule as public finances worsen, source says
By Nelson Bocanegra BOGOTA (Reuters) -Colombia's government has authorized the use of an "escape clause" to temporarily suspend compliance with its fiscal rule, a government source told Reuters on Tuesday, amid deteriorating public finances. The fiscal rule, established in 2011 by Latin America's fourth-largest economy, imposes limits on government spending and debt to ensure the long-term sustainability of public finances and macroeconomic stability. The government's Higher Council for Fiscal Policy (CONFIS) met on Monday and authorized the suspension that will increase the South American nation's fiscal deficit from the government's 5.1% target. The finance ministry plans to hold a press conference on Friday to provide details about the decision and release its medium-term fiscal framework detailing new financing objectives. "It's possible that these include piecemeal austerity measures," wrote analysts at Capital Economics in a note. "But the government has a track record of missing its targets by a wide margin in recent years." The peso currency had weakened around 0.75% against the dollar in morning trading. "It doesn't look like the deterioration in the fiscal situation has been fully priced in (by the market) yet," the Capital Economics analysts said, adding that sovereign dollar bond spreads could widen a further 30 basis points. In 2024, Colombia logged a fiscal deficit of 6.8% of GDP, above the targeted 5.6%. While the government maintains that it adhered to the fiscal rule that year, analysts generally disagree. Last week, Finance Minister German Avila - a close ally of President Gustavo Petro - said that the government would roll out measures including increased borrowing and spending cuts, though he did not provide details. Colombia's autonomous committee on fiscal rule (CARF) previously estimated that the nation would need budget adjustments of between 40 trillion pesos ($9.74 billion) and 75 trillion pesos ($18.26 billion) to comply with the 5.1% deficit target. In mid-May, ratings agency Moody's said that Colombia's sovereign credit rating, currently at Baa2, was dependent on the "frank disclosure" of the country's fiscal figures in the forthcoming fiscal framework.
