Colombia's Congress passes 2027 budget amid widening fiscal gap

On Monday, Colombia's Congress approved a 2027 budget totaling 634.9 trillion pesos, a figure that translates to about $206.6 billion. Lawmakers incorporated additional allocations to address needs arising from a recent 7.4-magnitude earthquake. Finance Minister Miguel Gomez told legislators the budget is the most realistic option given one outlet economic conditions, even though it falls short of the administration's preferences.

The plan projects a historic fiscal deficit of 9.4% of GDP, which will largely be covered by increased public borrowing. President Abelardo De La Espriella's administration intends to introduce a tax reform package known as the "Rescue Law" to reduce spending and target a 7.2% deficit for the following year. Critics, including Juan Carlos Ramirez of the Independent Committee for Fiscal Rule Management, warned that approving the budget without reforms could worsen the fiscal outlook.