Colombia Turns to the IMF, Weeks After Its Finance Minister Ruled It Out
COLOMBIA · ECONOMY · PUBLIC FINANCES
Key Facts
- —The country Colombia has about 53 million people and one of Latin America’s five largest economies. It exports oil, coal and coffee, and has long been known in the region for paying its debts on time.
- —The background The government now expects a deficit of 7.2 percent of GDP this year and 9.4 percent in 2027. The rating agency Fitch has warned that borrowing on that scale would need help from international lenders.
- —Why now Abelardo De la Espriella, president since 7 August, blames the hole on his predecessor, Gustavo Petro. Only three weeks ago his finance minister said Colombia would not seek an IMF deal.
- —What happened In a televised address on Sunday 27 September, the president said he had instructed the finance minister to lead talks with the International Monetary Fund on “a negotiated way out” of the crisis.
- —The numbers Hours earlier he said PepsiCo had told him it would invest US$1 billion over five years. He also claimed kidnappings fell 79 percent in August against a year earlier.
- —What it means for you Nothing changes yet for residents or visitors. Holders of Colombian bonds and pesos will want to know what kind of IMF arrangement is sought, and on what conditions.
- —Still open No amount, timetable or type of IMF arrangement has been published, and the Fund has not commented. PepsiCo had not confirmed the investment figure publicly by Monday morning.
Colombia’s president has told his government to open talks with the International Monetary Fund, the Washington lender for countries short of money. “The balance is in the red,” Abelardo De la Espriella said on Sunday evening.
For investors it is the most important line of a long televised address. It is also a sharp change of course: three weeks earlier, his own finance minister had ruled out an IMF deal.
What the president said
De la Espriella, a right-wing lawyer who took office on 7 August, now addresses the country most Sunday nights. This time he called the fiscal situation “the most critical in our entire history”.
He said he had given “clear instructions” to the finance minister and the whole economic team to lead talks with the Fund. The aim, he added, was “a negotiated way out of the crisis” left by “the irresponsible, corrupt people who came before us”.
He named no amount, type of arrangement or start date. He blamed the government of Gustavo Petro, Colombia’s first left-wing president: “They stole everything.”
He also argued that the streets look more prosperous than the state really is. Cocaine money and stolen public funds, he said, keep a bubble of apparent economic normality afloat.
A reversal in three weeks
In early September the finance minister, Miguel Gómez Martínez, told the national bankers’ convention that Colombia would not seek an IMF agreement.
What changed is the arithmetic: the government raised its deficit forecast for this year to 7.2 percent of GDP, from 5.3 percent. For 2027 it expects 9.4 percent, three times the ceiling the European Union sets its members.
Fitch has since said such sums would be hard to raise in bond markets without substantial support from international financial institutions.
Colombia has already lost its investment-grade credit rating. Fitch rates it BB, two notches into speculative territory, and S&P cut it to BB- in April.
Colombia and the Fund
Colombia is not a stranger to the IMF, but it has used it as insurance rather than a rescue. From 2009 it held a Flexible Credit Line, a standby facility the Fund offers only to countries with strong policies.
It drew about US$5.4 billion during the pandemic in 2020 and has since repaid it. The IMF froze access in April 2025 pending a review, and Colombia cancelled the line that October.
A new precautionary line would need the Fund to judge Colombia’s policies sound again. A full programme would bring money, but also conditions on spending and taxes.
PepsiCo, crime figures and a manhunt
Hours earlier, he wrote on X that PepsiCo had announced “an investment of US$1 billion in Colombia over the next five years”. “Confidence is shown by investing,” he added.
That is about US$200 million a year. PepsiCo says it spent US$158 million on its Colombian plants in the past five years combined.
The company had not confirmed the new figure publicly by Monday morning, nor said how many jobs it brings.
He claimed that August brought 79 percent fewer kidnappings than a year earlier, 62 percent less extortion and 58 percent fewer massacres. These are the government’s own figures for a single month and have not been independently verified.
He offered corruption suspects from the previous government a deal: cooperate “in exchange for benefits if they hand over the evidence”. He asked the justice system to weigh plea negotiations under the penal code; prosecutors and judges, not the president, decide those.
He also warned alias “Pinocho”, who leads an armed group around Santa Marta on the Caribbean coast. The state offers 3 billion pesos (about US$894,000) for him; “we are breathing down his neck,” he said.
What comes next
The first test comes in markets on Monday, then from the finance ministry and the IMF. Watch for the type of arrangement requested, its size, and whether the fiscal rule is restored.
Congress’s budget committees approved the 2027 budget of 634.9 trillion pesos (about US$189 billion) last week; both full chambers still have to vote. Any IMF deal would likely be tied to those decisions.
Colombia is not in default, has not asked for a bailout and has not signed anything. The talks are a presidential instruction, not yet a negotiation with the Fund.
Nor is the fiscal picture new: the president described much of it in his address of 13 September. What is new is that he has named the IMF as part of the answer.
Frequently Asked Questions
Is Colombia asking the IMF for a bailout?
Not yet. The president has told his finance minister to lead talks with the IMF. He has named no amount or type of arrangement, and nothing has been signed.
Why does Colombia need outside help?
The government expects a deficit of 7.2 percent of GDP this year and 9.4 percent in 2027. Fitch has said borrowing that much in bond markets would be hard without support from international lenders.
Has Colombia worked with the IMF before?
Yes. From 2009 it held a precautionary Flexible Credit Line. It drew about US$5.4 billion during the pandemic, has since repaid it, and cancelled the latest line in October 2025.
Does this affect travellers or people living in Colombia?
Not directly for now. Over time, an IMF arrangement usually comes with spending cuts or tax changes, which could touch subsidies, public services and prices.
Sources: Valora Analitik, IMF instruction, 27 September 2026, La República, IMF instruction and security figures, 27 September 2026, Infobae, address, 27 September 2026, El Tiempo, corruption suspects, 27 September 2026, Semana, security figures, 27 September 2026, Semana, Pinocho reward, 27 September 2026, Portafolio, PepsiCo, 27 September 2026, Valora Analitik, PepsiCo, 27 September 2026, IMF press release, Colombia cancels the Flexible Credit Line, 1 October 2025, IMF press release, Colombia draws on the Flexible Credit Line, 3 December 2020, Portafolio, budget passes joint economic committees, September 2026, Colombia One, IMF pandemic loan repaid, 23 April 2026, Fitch Ratings, Colombia budget comment, September 2026. The PepsiCo figure comes from the president’s post on X of 27 September; PepsiCo’s past-investment figure is from company information reported by Valora Analitik. Pesos converted at 3,356.68 per US dollar, the closing rate of Friday 25 September 2026. All retrieved 28 September 2026.
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