More than a month before his inauguration, and just as the transition process with the government of President Gustavo Petro has begun, President-elect Abelardo de la Espriella has already assigned a mission to his designated Finance Minister, Miguel Gomez. The future head of the economic portfolio will travel to the United States to seek the refinancing of Colombia’s public debt.
De la Espriella believes that the country’s net public debt is at historically high levels, and has therefore announced that refinancing it will be one of the priorities of his administration.
Gomez will begin a working agenda in Washington with representatives of international banks and multilateral financial institutions, De la Espriella announced on his social media accounts.
Getting public finances back on track
The objective will be to advance negotiations that will improve the terms of the public debt by extending maturities and obtaining more favorable interest rates, to ease pressure on the country’s public finances.
Public debt is the money a government borrows to finance its expenditures when its revenues — such as tax collections — are insufficient, according to the Bank of the Republic.
“Refinancing the debt will be one of the many measures we will adopt to get public finances back on track and restore confidence in the national economy,” the president-elect said.
The objective of Gomez’s meetings with international banks and multilateral financial organizations will be “to advance negotiations that will improve the terms and interest rates of the public debt, provide breathing room for the country’s finances, restore fiscal order, and lay the foundations for rebuilding the Miracle of the Nation,” De la Espriella wrote.
“I will govern with discipline, responsibility, and credibility,” he said, adding: “Colombia will once again honor its commitments, strengthen its institutions, and inspire confidence around the world.”
The president-elect’s announcement came as his designated economic team began the transition agenda with the outgoing government and defined the priorities it will present to international markets and multilateral organizations during the first weeks of the new administration.
Colombia’s public debt equals nearly 60% of GDP
A report published last April by the economic think tank ANIF states that in Colombia, the government has consistently maintained spending above its revenues, as reflected in the fact that only eight of the past 35 years have recorded a primary fiscal surplus.
Colombia’s current public debt, equivalent to nearly 60% of gross domestic product (GDP), is comparable only to the levels observed at the end of the 19th century, when the country faced external debt payment problems and hyperinflation.
To illustrate the situation, ANIF offers this explanation: “At current debt levels, every Colombian would have to assume more than 20 million pesos (US$5,964), nearly 10 times what it represented 35 years ago.”
The decision to send the designated Finance Minister to Washington comes simultaneously with the serious warning issued by the Office of the Comptroller General, according to which Colombia currently faces a fiscal gap of nearly 27 trillion pesos in its 2026 national budget.
This situation could make it necessary to reconsider possible spending cuts this year. The Comptroller General’s report explained that the new government will have to address the challenges of preserving the long-term sustainability of the country’s public finances and its macroeconomic stability in order to maintain continued economic growth.