Colombia's incoming finance chief outlines $60bn fiscal adjustment plan

Miguel Gómez Martínez, the incoming Minister of Finance under President-elect Abelardo de la Espriella, announced a drastic fiscal adjustment of up to $60 billion (COP) to address what he calls a critical fiscal crisis. In interviews with multiple outlets, Gómez painted a dire picture: the government is spending $40 billion monthly while collecting only $28 billion, leaving a monthly deficit of $12 billion. He declared, 'La fiesta se acabó' Source: El Colombiano.

Fiscal Plan

Gómez’s first measure will be a decree freezing public spending, prohibiting new contracts and appropriations Source: Portafolio. He aims to reduce the budget growth below inflation and eventually cut spending in real terms. The adjustment targets a fiscal deficit of around 3% of GDP from an estimated 7.4% Source: La República.

Government Downsizing

A central part of the plan is reducing the number of ministries from 19 to 13, or even fewer, as 'Colombia no tiene cómo financiar 19 ministerios' Source: Infobae. This will require legal changes, but Gómez emphasized the urgency of cutting state size.

Tax Reform and Energy

Gómez criticized the outgoing government’s tax reform as 'el colmo del descaro' Source: Portafolio, but left open the possibility of a new reform focused on stimulating investment, not raising corporate taxes. He also pledged to restore energy security by resuming hydrocarbon exploration at Ecopetrol, including fracking Source: La Silla Vacía. On minimum wage, he argued increases must align with productivity, warning against populist hikes .