Colombia Faces New Financial Adjustments Amid Leadership Changes

Colombia's Finance Minister German Avila, recently appointed after Diego Guevara's resignation, suggests necessary spending and debt adjustments amidst financial instability. Following a failed tax reform, Colombia's budget requires significant revisions to meet fiscal targets. A new tax reform proposal is underway to address the budget deficit.

Colombia's Finance Minister German Avila announced on Thursday that the nation faces necessary financial adjustments in both spending and debt. This comes after Avila replaced Diego Guevara, who resigned this month amid tensions with President Gustavo Petro regarding budgetary constraints.

Guevara's swift departure, after just over three months, highlights the deep uncertainty surrounding Colombia's public finances. Avila, in his inaugural press conference, emphasized the urgency for additional spending adjustments. "We will equally have to make adjustments in terms of debt," he stated.

Following a failed tax reform resulting in a $2.9 billion spending cut, the government is considering further reductions while introducing a new tax reform proposal. The independent CARF suggests a further $9.68 billion adjustment is needed for fiscal compliance.

(With inputs from agencies.)