Finance Minister Miguel Gómez, on his first swing through New York since taking the job, met this week with banks, asset managers and hedge funds alongside Public Credit Director Cesar Arias and Vice Minister Juan Sebastian Betancur. People in the room said the team voiced confidence that Congress will support its plan to shrink the fiscal gap by over four percentage points by 2030. The Ministry confirmed these details when contacted.
Gómez's trip follows his disclosure of one of Colombia's widest fiscal shortfalls in recent memory. Without the proposed adjustment, the budget bill projects the deficit could stretch to 9.4% of GDP, a number that shook markets and halted gains that had been driven by De la Espriella's campaign promise to curb spending.
Officials indicated Colombia's external financing needs for 2027 may be around $15 billion, compared with 88 trillion pesos ($28 billion) in the budget. About half of that would likely come from multilateral lenders, and the government also plans to borrow an additional $5 billion before the end of the year.
The 10-year local bond yield is holding near 12.7%, the highest since early June. Since De la Espriella took office last month, optimism alongside high yields has buoyed Colombian assets. The peso is up almost 18% versus the dollar, topping the developing-world pack, and the country's dollar bonds have returned 4.1% versus a 0.3% average for emerging-market sovereigns, Bloomberg's index shows.
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With the budget now front and center, Bank of America anticipates that a watered-down iteration of the fiscal plan will clear Congress. "This is the best moment to do it, at the beginning of the mandate, when political capital is higher and other parties are negotiating to get a share of power," strategists including Ezequiel Aguirre wrote. HSBC's Joseph Incalcaterra said, "I believe the numbers presented are the 'worst case' scenario and that the government plans to deliver on its fiscal consolidation promises," adding that advancing the fiscal adjustment law over the next few weeks will be important for sentiment.
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