Colombia’s Fiscal Rule Return Ruled Out in the Near Term
Colombia's fiscal rule will not be restored soon, the technical deputy finance minister said this week. The ministry is preparing spending cuts and a review of transfers instead. The post Colombia’s Fiscal Rule Return Ruled Out in the Near Term appeared first on The Rio Times .
Colombia's fiscal rule will not be reinstated anytime soon, according to the country's technical deputy finance minister, Juan Sebastián Betancur. Speaking at an annual banking convention on 26 August, Betancur said the government is instead focusing on building a medium-term fiscal anchor. The fiscal rule, a law that caps the central government's deficit and strives to lower debt, is currently suspended after the previous administration invoked an escape clause in June 2025, covering 2025, 2026 and 2027.
The technical deputy finance minister emphasized that Colombia has never delivered a correction of such magnitude. The ministry is calling for a four-year path to address the issue, rather than a single shock. Meanwhile, the central bank noted that inflation expectations remain elevated, with headline inflation at 6.1% in June, more than double the target. The bank's governor, Leonardo Villar, stated that the 3% goal would not be reached until 2028.
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