Colombian Congress approves budget allocations, cuts funding to peace deal

Colombian ‌lawmakers ​approved spending distributions for next year's 634.9 trillion pesos ($201.14 billion) budget on Tuesday, trimming spending linked to a 10-year-old peace agreement and boosting debt service payments.

The budget, which projects a 2027 fiscal deficit of 9.4% of gross domestic product, is ‌a significant increase from the 555.8 trillion peso budget for this year. The bill allocates 141 trillion pesos, about $45 billion for debt repayment next year, up from about $30 billion allocated in 2026.

Neither congress nor the finance ministry had published a complete breakdown of the approved budget by morning on Tuesday and a congressional source told Reuters a ‌final version could take days, as some modifications were approved by only one of the chambers. The bigger budget comes as Colombia, Latin America's fourth-largest economy, struggles ‌to put its public accounts in order. Public debt is expected to rise this year and next, moving the country further from regaining the investment-grade rating it lost in 2021.

The government of new right-wing President Abelardo De La Espriella had promised to trim remaining spending for this year and said it plans to propose a 'Rescue Law' to Congress to cut 2027 spending and reduce the fiscal ⁠deficit to ​7.2% of GDP. Lawmakers in the lower house ⁠approved the bill with 112 votes in favor and only one against it, while in the Senate it passed with 57 votes in favor and one against.

Lawmakers had until Tuesday night ⁠to pass the budget before it would be possible for the government to put it through via decree. "Thank you all for giving us this vote of confidence. We are going to ​succeed in getting the country out of this very complex economic situation," Finance Minister Miguel Gomez said after the Senate passed the bill late ⁠on Monday night.

SPENDING CUTS The budget cuts funds for the Special Jurisdiction for Peace (JEP) - the court created under a 2016 peace deal with the former Revolutionary Armed Forces of Colombia (FARC) guerrillas to try rebel ⁠leaders ​and ex-soldiers for war crimes - by some 181 billion pesos, the finance ministry said in a statement, and reassigns that money to the defense ministry.

The cut amounts to 23% of the court's budget, an even deeper reduction than had been previously expected. The court has said cuts will limit investigations and trials, make ⁠it difficult to provide victims with lawyers, psychological support and travel expenses, and put security schemes to protect victims and former combatants at risk.

The operational budget ⁠for the Search Unit for Disappeared People, created ⁠under the peace deal to look for at least 137,000 people who vanished during the ongoing armed conflict, was cut by nearly 22%. The unit has warned a cut of that magnitude will threaten DNA collection from families and some ‌10,000 planned exhumations of remains.

($1 = ‌3,156.50 Colombian pesos)