He Colombian government will reduce investment by 39 billion pesos (about 9.724 billion dollars) public in 2025 due to the country’s high debt due to the Covid-19 pandemic, President Gustavo Petro announced on Tuesday.
(Read: In four years, the debt ceiling in Colombia would have to be raised again).
“In the most negative but most realistic scenario (…) we have to reduce public investment from 96 billion pesos (about 23.934 billion dollars) this year to 57 billion pesos (about 14.213 billion dollars) next year to pay off debt”Petro said during the ceremony of transfer of command of the commander of the Military Forces.
The president recalled that “There was a huge over-indebtedness in the country to cover the reaction against Covid” and that debt must be paid in “these two years”.
“It is not a long-term debt, nor could it even be mentioned as a short-term debt. I would say: I am making the credit card payment, 5.6 billion dollars, which must be paid this year and next year.” Petro added.
(See: Congress approved the increase in the debt limit for the Petro government).
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The president assured that if he had had to deal with the health crisis, he would have “preferred another type of policy that was not indebtedness, as the United States did, which was issuance”.
“But in Colombia there is too much economic fundamentalism and issuance is considered satanic, and sometimes it has to be done. They did it when it was about saving bankers, but they did not do it when it was about saving human lives, endangered by the pandemic.”said Petro, who has stated on numerous occasions that his predecessor, Iván Duque, left the country heavily indebted.
(Also: Debt ceiling and fiscal rule: a binomial that demands rigor).
Last June, Moody’s credit rating agency confirmed Colombia’s Baa2 credit rating, although it lowered the outlook from stable to negative due to the challenging macroeconomic conditions facing the country..
EFE
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