How the recovery plan would help pay off the external debt, according to the Government

On his social networks, the President Gustavo Petro He spoke about the increase in the country’s external debt, shortly after former President Álvaro Uribe expressed his concern about the growth projections for this figure, which, according to the former President, would reach 55.3% of the national GDP.

The current president, on his social networks, assured that this growth is “worrying“, as Uribe said. “I saw it (debt growth) at 76 trillion in 2022 and next year it will be at 116 trillion“.

(We recommend: What explained the rise in inflation in June and why the country got off easy).

However, the head of state pointed out that much of the weight of these red figures was due to the debt acquired by the country with the International Monetary Fund (IMF) to deal with the effects of the covid-19 pandemic, in terms of payroll subsidies of the “big enterprises“during the government of his predecessor, Ivan Duke.

“The IMF debt of 5 billion dollars that Uribe’s friend, Mr. Duque, chose as a method to finance the payroll subsidy of large companies due to the Covid-19 situation will be paid in these two years. Going into debt to subsidize the richest“, said the President of the Republic.

(You can read: Irregularities in the Ministry of Sports: fiscal findings of more than $31 billion).

And he added: “The irresponsible economic management of the previous government and the deep corruption that broke out, led the country to bankruptcy“.

He also took the opportunity to defend the last tax reform made just arrived at the Narino Palacementioning that this was the mechanism with which the payment of the external debt was going to be managed: “The solution proposed by this government: the 2022 tax reform was destroyed by a court decision“.

Thus, President Petro confirmed the economic recovery plan that your Government is proposing for to clean up the slowdown of the national economyas well as a financing law for “make up for what was lost in tax reform“.

And he asked him to support these projects: “I hope that Dr. Uribe’s party will help the country and not sabotage the measures.“.

(You may be interested in: Economic reactivation: these are the first proposals of the Petro Government).

Faced with this strategy, the Minister of Finance and Public Credit, Ricardo Bonillaexplained in an opinion column for EL TIEMPO how it would be carried out, highlighting the importance it will have now with the latest reduction in the monetary policy interest rate (11.25% for July) and the economic growth projections of the world Bank for the country, located at 1.3% for 2024 and 3.2% for 2025.

Ricardo Bonilla, Minister of Finance and Public Credit

Presidency

Within this plan, the head of the portfolio stated that there is a package of tax incentives that “It must be processed through a bill, which is expected to be presented in the new legislature.“.

(Read also: What will happen to the country’s toll prices? Outgoing Ministry of Transport responds).

He mentioned that these stimuli would have the objective of reactivating the economic dynamics without losing the consolidation of the fiscal balance and “honoring the inherited debt, which rose from 48% to 61% of GDP between 2019 and 2020, representing more than 200 billion pesos“, which is in line with what the president said in response to what happened during the last pandemic.

“This means that the pandemic was paid for with debt equivalent to more than 10 tax reforms and it is up to this government to honor it by complying with the fiscal rule. In addition, it is worth noting that there is another debt that was acquired outside the quota (US$ 12,000 million) because it was processed within the framework of the declaration of emergency, but it corresponds to commitments that have to be paid between 2024 and 2025, although the payments do not release the quota. For this reason, Congress has just approved a debt quota of US$ 17,607 million, clarifying that the Government is not contracting more debt, but is simply making its accounts clear and obtaining resources to honor acquired credits.“, he added in the column.

BRIEFCASE