Oct 20 (Reuters) – Colombian lawmakers approved spending distributions for next year’s 634.9 trillion peso ($201.14 billion) budget early on Tuesday, trimming spending linked to a 10-year-old peace agreement, boosting defense funds and reducing 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 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 budget bill with 112 votes in favor and only one against it.
“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 on Monday.
($1 = 3,156.5000 Colombian pesos)
(Reporting by Luis Jaime Acosta, Carlos Vargas and Nelson Bocanegra; Editing by Andrew Heavens and Jacqueline Wong)
