Overview and Background
According to Colombia’s Ministry of Finance, the fiscal deficit reached 0.7% of GDP in April, up from -1.1% of GDP a year ago. This has pushed the deficit to its highest level since the pandemic began in 2020.
Comparison with Previous Year
Based on data from Banco Itaú, the current deficit accumulation is 0.8% higher than the same period in 2024. This increase is attributed to a rise in government spending from 8% of GDP to 8.5% of GDP, while revenues decreased from 5.9% of GDP to 5.7% of GDP.
Economist Insights
Economists from Banco Itaú noted that May incomes increased interannually but fell short of expectations, keeping fiscal accounts under pressure.
Government Spending and Budget Execution
According to the University of Javeriana’s Fiscal Observatory, President Gustavo Petro’s administration has shown the lowest budget execution rate among the last six Colombian governments, at 85% for 2025. In contrast, during Alvaro Uribe’s term, the budget execution rate was 88.4% when it averaged 90.3% historically.
Key Questions and Answers
- What is the current fiscal deficit in Colombia? The fiscal deficit reached 0.7% of GDP in April, with an accumulated deficit of 2.8% of GDP by the end of April 2025.
- How does this deficit compare to previous years? The current deficit is 0.8% higher than the same period in 2024, driven by increased spending and decreased revenues.
- What are economists saying about the fiscal situation? Economists from Banco Itaú mention that although May incomes increased, they were below expectations, causing continued fiscal pressure.
- How does President Gustavo Petro’s administration compare to previous ones regarding budget execution? Among the last six Colombian governments, Petro’s administration has the lowest budget execution rate at 85% for 2025, compared to an average of 90.3% historically.
