Both the Senate and the lower house backed the government's 635 trillion-peso plan for 2027, a double digit increase that keeps the topline intact while shuffling money inside it. Lawmakers redirected 8.4 trillion pesos away from interest and principal payments toward investment and aid tied to the powerful August quake in western Colombia.
Bond yields in Colombia have climbed since the administration rolled out its plan in August, signaling rising risk perceptions. Underscoring that pressure, Nigel Chalk, who leads the IMF's Western Hemisphere Department, said last week that Colombia's fiscal position is "unsustainable." The government's own projections add to the urgency: without policy fixes, next year's deficit could top 9% of GDP.
President Abelardo de la Espriella, who took office in August, is pursuing a new IMF arrangement to help address what his team says is the severe budget mess inherited from the prior government. Finance Minister Miguel Gómez called the situation critical and, after the lower house vote, said, "This is the first step to start recovering the stability of our economy," adding, "To generate growth and prosperity as we hope it will be in the coming years." An IMF technical group is slated to be in Bogota in November to keep preliminary discussions going on possible support.
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The administration now needs Congress to sign off on a fiscal adjustment equal to more than 2% of GDP, a move that will shape the path for deficits, debt service and, by extension, local rates. In plain English: the mix of higher spending, a potential IMF backstop, and a pending consolidation plan will set the tone for Colombian assets into 2027.
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