“As a result, the economy is expected to grow for seven consecutive years through 2026 budget deficits greater than 4% of GDP, meaning a primary surplus will not be achieved until 2027,” the director of Fedesarrollo, Luis Fernando Mejía.
The entity states that the budgetary strategy of the Government This allows you to identify a economic slowdown better pronounced.
“Colombia has spent seven consecutive years with it budget deficits more than 4% of GDP, which is unprecedented in history and not comparable to other economies in the region. And while they claim that the Government did tax adjustmentsreaffirm that the consolidation of public finances remains one of the EU’s key challenges economic policy‘ he emphasized Fedesarrollo.
In this sense, they stressed that while the 2023 edition of the framework projected that government net debt would converge towards the debt anchor set by the Tax rule In 2034, the 2024 framework update estimates that it will reach 55.4% of GDP in 2035, slightly above this threshold.
They indicate that there will be a shortage of Central Government equal to 5.6% of GDP, 1.3 percentage points higher than in 2023 (4.3%), in line with the limit set by the Tax ruleThis increase in the deficit explains Fedesarrollois mainly due to a decline in income from the Government by 1.7 percentage points, from 18.8% to 17.1% of GDP between 2023 and 2024.
“This decline in turn is the result of lower prices income non-oil products (1.3 points of GDP), lower dividends Eco-gasoline (0.7 points of GDP) and lower oil revenues (0.5 points of GDP), partly offset by increases in oil prices income derived from the management of the DIAN (0.2 points of GDP), more resources from the Social Investment Law (0.3 points of GDP) and higher returns from the Banco de la República (0.4 points of GDP). GDP),” the report said.
Concerning the primary expenditurea reduction of 1.2 percentage points is expected, from 19.2% to 18% of GDP. However, this adjustment will be offset by an increase in interest payments of 0.8 percentage points of GDP, reaching 4.7% of GDP, the highest level so far this century.
Source: El heraldo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
