Colombian Congress Approves $17.6 Billion Debt Ceiling Increase
- The lower house and Senate committees of the Colombian Congress approved a request from President Gustavo Petro’s leftist government to increase the country’s debt ceiling to $17.6 billion.
- The move is aimed at financing development plans and meeting payment obligations.
- The votes come amid warnings from analysts about Colombia’s fiscal needs, after Petro had threatened last month to stop paying debts or declare an economic emergency if the ceiling was not raised.
- A collapse in tax collection has raised concerns, with the government facing an estimated budget shortfall of around $7 billion this year.
- An independent oversight committee has already warned that Colombia will not comply with its fiscal rule in 2023.
- Finance Minister Ricardo Bonilla told lawmakers that the current debt ceiling would have led to a $1.37 billion deficit for 2024.
- The request, approved with 28-1 votes in the lower house committee and 11-1 in the Senate committee, will now go to the plenaries of both houses next week for final approval.
- Petro has promised ambitious reforms to labor laws, healthcare, and pensions, as part of a $298 billion four-year development plan.
The finance ministry has said the debt ceiling respects government deficit projections, which were revised upward to 5.3% of GDP at the start of the year.
The government requested the debt ceiling increase – a measure usually approved about every four years – in March.
($1 = 3,944.14 Colombian pesos).
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