He Finance Minister Ricardo Bonilladefended yesterday the accounts and projections that the ggovernment by Gustavo Petroand reiterated that the Government remains committed to complying with the law of the fiscal rule.
This, after this Monday the Autonomous Committee of Fiscal Rule (Carf) issued a statement in which it questioned the possibility that next year the fiscal rule would not be complied with due to the high level of spending that was estimated in the Medium Term Fiscal Framework (MFMP) presented last month, and for income, which according to the Carf, are not accurate.
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“We remain committed to respecting the fiscal rule, it is a very tough fiscal rule, which places us at the limits”, assured the minister yesterday in statements to the media.
As explained by the head of the Treasury portfolio, the biggest problem facing public sureties next year is related to the debt accumulation and the maturity profile that the Nation has for the next two years.
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As Bonilla had also mentioned when he presented the Fiscal Framework, he also indicated that the Government is reviewing how to pay the debt in 2024 without difficulties, and that this requires a series of efforts, “and that is the reason for the concern of the Fiscal Rule Committee”, said the minister.
Bonilla assured that the Government is not interested in making any moratorium or in declaring any non-compliance with the International Monetary Fund (IMF)entity with which debts must be settled in the next two years.
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It is worth remembering that in the Medium-Term Fiscal Framework it was projected that the fiscal imbalance will arrive, cAs a percentage of GDP, to -4.3% and -4.5%respectively.
The document also projects that between 2023 and 2024 primary spending would see an increase of 1.2 percentage points, and the projection indicates that this would rise from $309.05 trillion as projected in 2023 to $347.49 trillion in 2024. And it would go from representing 19.2% of GDP in 2023 to 20.5% in 2024.
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In the pronouncement of the Autonomous Committee it was questioned that the MFMP is “predicts that by 2024 there will be a deterioration of both the fiscal deficit and the net government debt, despite having approved two tax reforms in the last two years that significantly increased the Nation’s income”.
Likewise, the CARF indicated in its pronouncement that the increase in programmed primary spending imposes greater pressure on the Nation’s accounts and that “If the National Government budget is programmed for 2024 with a spending ceiling as provided for in the MFMP, it would be giving rise to a possible breach of the Fiscal Rule Law, by not complying with the correspondence between structural expenses and income”.
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Another point that the CARF questioned this week is that the Fiscal Framework takes into account additional income linked to the management of the Dian, equivalent to 1.3% of GDP, but “about which there is no certainty”. And he also questioned that the Nation expects to receive $15 billion in 2024 from litigation arbitration.
Bonilla also mentioned in his statements that within Dian’s evasion and avoidance control policies, litigation is a permanent fiscal management policy.
“It is an interpretation, for the CARF it is an occasional income, for the Dian it is a permanent income to close litigious processes”, indicated the minister.
LAURA LUCIA BECERRA ELEJALDE
Portfolio Journalist