IMF Welcomes Colombia’s Plan to Cut Deficit

COLOMBIA · ECONOMY

The International Monetary Fund welcomed Colombia’s fiscal rescue bill on Monday. It did not endorse any single tax, and no loan has been agreed.

The International Monetary Fund (IMF) welcomed Colombia’s fiscal package on Monday, 2 November. The government of President Abelardo De La Espriella filed the bill in Congress on Thursday, 29 October.

IMF spokesperson Julie Kozack called the filing “a significant step toward addressing fiscal challenges inherited by the new administration.” The statement, posted on X, backs the decision to submit the bill, not any single measure.

What the IMF Said

Kozack wrote that the IMF welcomes the authorities’ decision to submit an important fiscal package to Congress. She added that the fund expects to keep working closely with them.

The text names no tax and no figure, and it announces no loan. That matters because some local headlines said the IMF backed the new taxes, which the statement does not say.

What Is in the Bill

Finance Minister Miguel Gómez Martínez and Vice President José Manuel Restrepo filed the 106-article bill in the Chamber of Representatives. It is numbered Bill 477 of 2026.

The government seeks COP 40 trillion to 45 trillion (about US$12.6 billion to US$14.1 billion), or 2.2% of GDP. Without it, the government says the 2027 deficit would reach 9.4% of GDP.

Restrepo says spending cuts make up about 70% of the effort, with taxes the rest. The bill would also give the president six months of powers to merge or close ministries.

On taxes, the corporate rate would fall from 35% to 33% in 2027 and 31% from 2028. VAT of 19% would reach goods now taxed at 0% or 5%, partly from 2028, including purchases from foreign online platforms.

Why the IMF Matters Here

On Friday, 16 October, Nigel Chalk, head of the IMF’s Western Hemisphere department, said Colombia’s fiscal situation was neither sustainable nor viable. A technical team is due in Bogotá in November.

Chalk has described talks with the government as exploratory. No loan or programme has been agreed.

Where the Bill Stands in Congress

The bill must pass the economic committees and then the plenaries of the Senate and the Chamber. The ordinary session ends on Wednesday, 16 December, so the window is narrow.

Lawmakers from several parties, including the governing coalition, have questioned the new taxes and say they will review them closely. The final text may differ, because articles can be changed or dropped.

Banco de la República, the central bank, kept its policy rate at 12.25% on Friday, 30 October. Borrowing costs therefore stay high while lawmakers weigh a bill meant to narrow the deficit.

What It Means for You

Investors in Colombian bonds and US-listed Colombian companies should watch the committee votes, because the tax and spending changes could be altered. The IMF’s words are support, not money.

Shoppers who order from abroad could face 19% VAT on small parcels from 2028 if the bill passes. Travellers and expats face no change today, because nothing is law yet.

Related Rio Times reports include the rescue law explained in five points, the tax reform plan and the fiscal watchdog’s warning. More is on the Colombia hub, in the Latin America Power Index and on the Bogotá city page.

In Plain English

A fiscal package is a set of tax and spending changes that shrink the gap between income and spending. The IMF is the global lender that advises governments and lends to those in financial strain.

What Is Not Known

The IMF’s own page for the statement could not be opened, so its wording was checked across several Colombian outlets. The statement endorses no specific tax, and it is not known whether the IMF backs the VAT or income-tax changes in detail.

Government savings estimates run from COP 40 trillion to 45 trillion (about US$12.6 billion to US$14.1 billion). The bill sets no total, and coverage differs on some tax details.

One account links the IMF visit to a request for a regular Article IV review, which could not be confirmed. No date for the visit or any committee vote has been published.

Frequently Asked Questions

What did the IMF say about Colombia’s fiscal bill?

IMF spokesperson Julie Kozack said on Monday, 2 November, that the package is a significant step toward addressing inherited fiscal challenges. She did not endorse any single measure.

Has the IMF lent money to Colombia?

Not yet. Talks are exploratory, no programme has been agreed, and an IMF team is due in Bogotá in November.

What does Colombia’s rescue bill do?

It seeks an adjustment of about 2.2% of GDP, mostly from spending cuts, plus changes to income tax, VAT and company tax. It also gives the president six months of powers to merge ministries.

When will Congress vote on the bill?

No vote date is set. The ordinary session ends on Wednesday, 16 December, so committees must move quickly.

Sources: International Monetary Fund, Colombia country page; statement of spokesperson Julie Kozack on X, 2 November 2026, and remarks of Nigel Chalk, 16 October 2026; Ministerio de Hacienda y Crédito Público, rescue bill explainer; Cámara de Representantes, Bill 477 of 2026; Banco de la República, policy rate decision of 30 October 2026. Conversions use the official central-bank rate (TRM), 3,183 pesos per US dollar, valid 31 October to 3 November 2026.