Colombia's Ambitious 2026 Budget Proposal Amid Fiscal Challenges

Colombia's government has proposed a 557-trillion-peso budget for 2026 to tackle its fiscal challenges. The proposal, requiring Congress approval, includes tax reforms to address a wider fiscal deficit. President Petro faces resistance as Colombia's fiscal rule suspension raises the deficit target and affects debt ratings.

Colombia's government announced a 557-trillion-peso budget proposal for 2026 on Tuesday, aiming to confront the country's worsening fiscal conditions.

Despite President Gustavo Petro's budget plans facing resistance in Congress, urgent tax reforms are proposed to raise an additional 26.3 trillion pesos, or $6.306 billion, primarily through increased taxation measures.

Fiscal pressures mount as Colombia enters the final year of Petro's term, with a substantial fiscal deficit target of 6.2% set for 2026. The Finance Ministry dedicates significant portions of the budget to operating expenses, debt servicing, and investments.

(With inputs from agencies.)