JP Morgan published a report in which it warns of the change of course that Colombia should take given the current fiscal situation that passes through. The report analyzes the deterioration that the country’s economy has been experiencing in this area, driven, among other things, by low tax collection.
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According to the analysis, in April tax revenues recorded a drop of 45% compared to the same period of the previous year. This result translates into a contraction of 16.6% so far in 2024.
This performance would respond largely to the drop in income tax and VAT on imports, which contracted 54.3% and 23% in real terms, respectively.
To complete this table, the bank refers to the fiscal data corresponding to the first quarter of the year.
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Finance
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“Until March, the Treasury reported a primary deficit of -0.3% of GDP. Therefore, the fiscal deterioration in force since September 23 continues, with a primary deficit to date widened by 0.5% of GDP in comparison with the primary surplus reported in the first three months of 2023”indicates the report.
Given this situation of deterioration, JP Morgan’s analysis suggests that the spending reduction It should be among the solutions to be considered by the Government to turn this panorama around.
“According to our estimates, the total adjustment to compensate for the revenue mismatch would amount to around 1.6% of GDP. However, at this stage we expect the fiscal authority to reduce spending by around 1.0% of GDP”added the entity.
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