Fitch Warns Colombia’s Fiscal Deficit Could Near 7% of GDP in 2026
Colombia · Economy
Key Facts
- —The warning Fitch’s lead analyst for Colombia, Richard Francis, said the 2026 deficit will land near 7% of GDP, speaking at a Bogotá event on August 18, 2026.
- —The growth Fitch expects the economy to expand about 2.7% this year, decent but too slow to outrun the shortfall.
- —The rating Fitch already cut Colombia to BB with a stable outlook on December 16, 2025, down a notch from BB+.
- —The debt Fitch sees public debt at roughly 65% of GDP in 2026, up from 61.3% at the end of 2024.
- —The politics the budget was drafted by Gustavo Petro’s government in 2025; De la Espriella inherited it on August 7, 2026.
The warning lands weeks into Abelardo De la Espriella’s presidency, on a budget his predecessor Gustavo Petro designed.
Fitch Ratings has put Colombia’s public finances back under a harsh light. Speaking in Bogotá on Tuesday, its lead analyst for the country warned the 2026 deficit could reach nearly 7% of GDP.
He called the fiscal picture the country’s “Achilles heel.”
What Fitch Actually Said
Richard Francis is Fitch’s lead analyst for Colombia. At a company event in Bogotá on August 18, he laid out a blunt view of the numbers.
The fiscal deficit, he said, would climb to almost 7% of GDP this year. Because spending stays high, the gap keeps refusing to close.
A Warning, Not a Downgrade
It is worth being precise here. This was analytical commentary at an event, not a formal rating action, so no new grade was issued.
Fitch had already made its move in December. As a result, the comments read as a reminder of pressure that is still building, not a fresh cut.
Where the Fitch Rating Stands Now
On December 16, 2025, Fitch downgraded Colombia to BB from BB+. It also shifted the outlook to stable from negative.
That leaves the country one notch deeper into speculative, or ‘junk,’ territory. Since then, the rating has not changed.
The Deficit Problem in Plain Numbers
A deficit is simply the gap between what a government spends and what it collects. Colombia’s gap has been running wide for a while now.
The 2025 shortfall came in at 6.4% of GDP, better than the 7.1% target the government had set. Although the official 2026 target is 6.2%, Fitch expects the real figure to hover near 7%.
Why 2.7% Growth Is Not Enough
Growth of 2.7% is respectable for the region, and Fitch expects consumption to help. Still, it is not fast enough to shrink the debt on its own.
When an economy grows slowly while deficits stay large, debt tends to rise faster than output. That is why the growth figure matters as much as the deficit.
The Debt Keeps Climbing
Fitch expects public debt to reach about 65% of GDP in 2026, a level it calls high but still manageable. Gross central government debt closed 2025 at 64.4%, up from 61.3% a year earlier.
Because each year adds another large deficit, the pile grows steadily. Overall, the trend is the core of Fitch’s concern.
The Fiscal Rule That Got Switched Off
Colombia has a fiscal rule, a legal cap meant to keep deficits in check. On June 9, 2025, the government suspended it using an escape clause.
The pause covers 2025 through 2027, and it happened under Petro. Since the rule is off, markets have lost a familiar guardrail.
Whose Budget Is This, Anyway?
The 2026 budget was filed in Congress on July 29, 2025, by Petro’s finance ministry. It was filed at about 557 trillion pesos and finally approved at 546.9 trillion, or roughly US$175 billion.
So the spending plan and its deficit were designed before the handover. De la Espriella did not write it, yet he must now execute it.
What a New President Inherits
De la Espriella won a tight June runoff and took office on August 7, 2026. Since then, he has promised a tax overhaul and tighter spending.
The math he inherited is unforgiving, however. Any credit upgrade will likely require real cuts, higher revenue, or both, over several budgets.
What to Watch Next
Watch whether the new government revives the fiscal rule or lets the suspension run. Investors will also track any reform sent to Congress this year.
Meanwhile, future Fitch reviews will judge results, not promises. Until deficits narrow, the pressure on Colombia’s debt is unlikely to ease.
Frequently Asked Questions
Did Fitch downgrade Colombia again in August 2026?
No. These were analyst comments at a Bogotá event, not a rating action. Fitch last cut Colombia to BB on December 16, 2025.
What is Colombia’s current Fitch rating?
BB with a stable outlook, set on December 16, 2025. That is one notch below the prior BB+ and inside speculative-grade territory.
How big is Colombia’s 2026 deficit expected to be?
Fitch expects it to near 7% of GDP. The government’s own target was 6.2%, against an actual 6.4% outturn in 2025.
Who is Colombia’s president now?
Abelardo De la Espriella, inaugurated on August 7, 2026, after Gustavo Petro’s term ended. He inherited the 2026 budget Petro’s team drafted.
Connected Coverage
Sources: Reuters; Devdiscourse; Fitch Ratings.
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