Colombian VP Says Budget Needs US$22B Fix

COLOMBIA · ECONOMY

Colombia’s vice president says next year needs a fiscal adjustment of nearly US$22 billion. It would come on top of this week’s US$4.3 billion cut.

On Friday, 23 October, Vice President José Manuel Restrepo said Colombia needs almost 70 trillion pesos (about US$22 billion) in fiscal adjustment. He spoke at the construction industry’s congress in Cartagena, about 2027.

The figure is a proposal, not an approved cut, and no programme list has been published. Two decrees on Thursday, 22 October, cut the 2026 budget and fixed the 2027 budget; see the Colombia hub.

What Restrepo Said About the Colombia Fiscal Adjustment

Restrepo said next year must bring at least a “rescue” of almost 70 trillion pesos, Valora Analitik and Infobae reported. In Colombia one “billón” equals one trillion.

Conversions here use the 24 October 2026 rate, about 3,180 pesos per US dollar. One trillion pesos is about US$314 million.

He said no nation in the world has grown on waste and public spending, and that private investment is the only path. He blamed the previous government of Gustavo Petro for higher spending and debt.

Restrepo said debt rose from 800 trillion to over 1,200 trillion pesos (about US$377 billion) in four years, El Colombiano reported. Those are his figures, with no independent check.

For builders, he offered tax incentives in 16 departments hit by the 10 August earthquake and a wider works-for-taxes scheme. He also said 331 administrative obstacles in construction had been identified.

The Two Decrees Signed on 22 October

On Thursday, 22 October, Decree 1585 cut the 2026 budget by 13.8 trillion pesos (about US$4.3 billion), La República reported. Of that, 4 trillion pesos (US$1.3 billion) is debt service and 6.8 trillion (US$2.1 billion) is contracting.

Another 3 trillion pesos (US$0.9 billion) comes from running costs, such as service contracts and purchases the government calls unnecessary. President Abelardo de la Espriella called it the first big fiscal adjustment of 2026 and promised more.

The roads agency Invias took the biggest cut, over 1.44 trillion pesos (about US$450 million). Civil aviation lost 949 billion pesos (about US$298 million).

The national registrar, which runs elections, lost 775 billion pesos (about US$244 million). The Finance Ministry itself lost 252 billion pesos (about US$79 million).

La República reported Decree 1599 came about 15 minutes earlier, setting the 2027 budget at 634.9 trillion pesos (about US$200 billion). Congress had passed a budget of that size.

But the two chambers approved different texts and missed the 20 October deadline to reconcile them. That left the government to decree the budget itself.

The government says its decree keeps the total and the sector split agreed in the first committee debate. Semana reported that it takes effect on 1 January 2027.

Why Colombia’s Public Finances Are Under Strain

La República reported a 2026 deficit target of 7.2% of gross domestic product (GDP), and a projected record 9.4% in 2027. From January to July the deficit was 3.9% of GDP, a little over 76 trillion pesos (about US$24 billion).

Javeriana University’s fiscal observatory said about 24% of 2027 spending would go to debt service. It added that over 40% of funding would come from new borrowing, with tax revenue under 14% of GDP.

Vanguardia reported that the economy shrank 0.04% in August, citing weak farming, mining, industry and construction. The Rio Times has reported on the IMF cut to its Colombia growth forecast and on Colombia’s talks with the IMF.

How 70 Trillion Pesos Compares With Earlier Plans

Vanguardia and La República reported that the rescue law would cut about 45 trillion pesos (about US$14 billion), or 2.2% of GDP. Restrepo’s almost 70 trillion pesos is higher, and the sources do not say whether the two figures measure the same thing.

Finance Minister Miguel Gómez Martínez said the rescue law will centre on spending and may review some tax exemptions. The Centro Democrático, the party of the Uribe movement, asked for at least 40 trillion pesos (about US$12.6 billion) in cuts.

Opposition senator Álex Flórez of the Pacto Histórico, Petro’s party, warned that the law would become a tax reform. The ministry says it is not a tax reform, La República reported.

In August the Council of Ministers authorised cuts of up to 21.9 trillion pesos (about US$6.9 billion) for 2026. With 13.8 trillion used, up to 8.1 trillion pesos (about US$2.5 billion) of room remains, La República reported.

In Plain English

• Fiscal adjustment: a mix of spending cuts and, possibly, tax changes that shrinks the budget gap.
• Rescue law: the government’s planned bill to cut spending, not yet filed in Congress.
• Decree: an order signed by the government that takes effect without a vote in Congress.
• One trillion pesos: about US$314 million at the 24 October rate.

What It Means for US Readers

Investors in Colombian dollar bonds, the peso and US-listed Colombian companies such as Ecopetrol should watch the rescue law. Its size, and the split between cuts and taxes, will shape the country’s debt path.

Restrepo also invited firms to pitch projects at the first Milagro Week in New York, planned for 16 to 19 November. Colombian firms can pitch there for international financing, as the government seeks private capital.

The Rio Times has also covered the August plan for a US$6.84 billion spending cut and Fitch’s view of the 2027 budget. Earlier coverage also looked at the market reaction to the 2027 deficit.

What Is Not Known

The sources quote only Restrepo for the almost 70 trillion pesos, and no Finance Ministry statement on that figure was found. It is also not stated whether it means spending cuts, taxes or both.

No ministry or programme list for the 2027 adjustment has been published, and the rescue law text is not public. The decree texts were not opened; figures come from outlets that cite them.

What Comes Next

The Finance Ministry has said it will file the rescue law now that the budget is decreed. The chair of the House third committee said on 20 October that filing would come in the first week of November.

Restrepo’s figure does not make a 70 trillion peso cut law, and the decreed 2027 budget still stands at 634.9 trillion pesos. Any adjustment needs further decisions, and Congress’s ordinary session ends on 16 December.

Frequently Asked Questions

How big is the Colombia fiscal adjustment?

Vice President José Manuel Restrepo said 2027 needs almost 70 trillion pesos, about US$22 billion. He called it a rescue, and gave no breakdown.

Is the 70 trillion peso cut approved?

No, it is not approved. It is Restrepo’s estimate of what next year needs, not a decree or law.

What did Colombia cut this week?

Decree 1585 cut the 2026 budget by 13.8 trillion pesos, about US$4.3 billion. Debt service, contracts and running costs make up the cut.

Why did the government decree the 2027 budget?

Congress passed the budget, but the two chambers approved different texts and missed the 20 October deadline. Decree 1599 set it at 634.9 trillion pesos, about US$200 billion.

What is the rescue law?

It is a planned bill to cut spending and review some tax exemptions, not yet filed in Congress. The finance minister says its core is spending, not a tax reform.

Sources: Valora Analitik, 23 October; Infobae Colombia, 24 October; El Colombiano, 23 October; Vanguardia, 23 October; El Diario, 24 October; La República, Decree 1585; Semana, Decree 1599; EFE via Infobae, 22 October; La República, rescue law, 20 October; Vanguardia, 20 October; open.er-api.com exchange rates, 24 October (all accessed 24 October 2026).