The drop in tax collection and the increase in public spending continue to take their toll on the State’s accounts, which seems to have once again lost the liquidity it showed at the end of October and is once again approaching the levels lowest in the last 20 years, raising the same alerts that were observed in May.
According to reports from the Bank of the Republic, the resources of the Nation in the official accounts, which are measured by the Remunerated Deposits of the National Treasury (DTN), as of last Friday, December 6, were located at $6.4 billion, which initially translates into a drop of $1.2 billion compared to the previous day and more than $9 billion compared to how the week began.
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“On Friday, December 6, the balance of the DTN availability in the Bank of the Republic was $6.4 billion, which represents a decrease of $7.3 billion compared to Friday, November 29, 2024. During the week it maintained an average of $12.2 billion, that is, $5 billion less than the previous week,” the report specifically says.
This is the second lowest level since the first week of May, where this indicator managed to fall to $2.3 trillion, its lowest point of the current century. To better understand the cash squeeze, it must be said that a year ago, at this same time, cash balances were around $18.5 billion.
Ministry of Finance and Public Credit
Private file
Lost progress
If we take into account that a little more than a month ago (end of October), the Nation’s accounts were at $26.8 billion, their best point of the year, although below the average, it can be said that during November they lost the reliefs they brought for the State treasury the resources that normally come from income tax returns.
Due to this, the Government is once again on the ropes, since the money it has to implement the social programs it planned is limited and it is left with no room for maneuver for strategies beyond the budget cuts and under-execution that already exists. is being implemented.
htoand what to say that although the Ministry of Finance has already said that it will cut $33 billion of the General Budget of the Nation, experts suggest that this adjustment should exceed $50 billion, which would be carried out through a strategy of non-execution of spending accounts, which put investment as the most sacrificed.
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If we take into account that on November 6, National Treasury deposits were at $19.2 billion and from there they fell to $6.4 billion on December 6, it is valid to say that these accounts were reduced by 63.1 % during the last month. At this point it must be said that generally on these dates resources tend to contract, however, current levels worry the market.
What happened?
To better understand this situation, Portafolio spoke with Camilo Pérez, head of Economic Research at Banco de Bogotá, who began by highlighting that the constant in 2024 in the Nation’s accounts has been to be located at the lowest levels, which is not good because, in the event of an emergency, it would force you to resort to debt.
“The Government’s cash issue has been complicated all year. The Government has remained very close to the minimums at each time of the year for the last approximately 20 years. This is the result of low tax collection, at the same time that expenses continue to grow at a non-negligible rate,” he began by saying.
Colombian pesos
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Pérez added that “although the Government has made a great effort to solve the situation, because at the end of the day the result of the cash is that. It is a difficult fiscal situation in general and I would say that in the end everything is based on perhaps too optimistic planning”, a situation that, from his perspective, should make the Government think.
The head of Economic Research at Banco de Bogotá emphasized that the fact that taxes are not meeting expectations reaffirms that expectations were too high and that this ended up having an important impact, since expenses are planned with based on income.
“The consequences are already being seen, in the first half of the year we had a government that contributed significantly to growth and in the most recent months for which we have official information, what is being seen is that the government’s contribution to the economy is much smaller to the extent that it is effectively restricting its spending and is underexecuting in order to maintain an acceptable cash situation and ultimately comply with the fiscal rule,” he highlighted..
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Carf updates accounts
Although things became complicated again, for the remainder of the year there is no hope of improvement, given that according to the most recent balance sheet of the Autonomous Fiscal Rule Committee, the collection of the two main internal taxes, income and VAT, is below the projected execution for October.
“The collection of external taxes is above the projected execution by the Committee to October. Likewise, the accumulated gross collection as of October is $9.9 billion below the projected execution, increasing the gap compared to the $8.8 billion that was accumulated as of September,” they explained.
Taxes
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This authority added that “the availability of cash in pesos has remained below its historical average throughout 2024 and at the end of November it stood at $13.7 trillion, close to the historical minimum in November since 2012.”
However, it closes by acknowledging that the government has spent less money from the investment budget, with only 44.8% executed so far, which means fewer resources used for important projects and programs, good news that would add to the fact that the cost of interest on the country’s debt has fallen in comparison with last year thanks to better conditions in the financial market.
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