Colombia faces default risk if Congress fails to approve a fiscal adjustment bill, Vice President José Manuel Restrepo warned in an interview with Semana. Without the legislation, the country risks entering default next year, with a projected financing gap of 80 to 90 trillion Colombian pesos ($25-25.4 billion). The government estimates the budget deficit could exceed 9% of GDP.
President Abelardo de la Espriella's Economic Rescue Bill aims to restore stability through spending cuts and tax reforms. However, opposition centers on tax increases, with the Democratic Center party supporting cuts but rejecting new burdens. Restrepo warned that failure would trigger recession, rising inflation, hyperinflation, and push over 1 million people into poverty.
The government recently issued the 2027 budget by decree, setting spending at 635 trillion pesos, which has raised investor concerns. Restrepo emphasized the bill is essential, stating, "We either save ourselves or we're screwed. There are no other alternatives.".
Source: Bloomberg Markets · Summarized by HeadlinesBriefing