Colombia Contemplates Fiscal Rule Suspension Amid Financial Strain
Colombia's government is considering suspending its fiscal rule to address financial deterioration. The decision, which might unsettle markets, will be deliberated by the Superior Council for Fiscal Policy. The government is expected to announce revised fiscal targets and plans for returning to compliance soon.
In a bid to address worsening financial conditions, the Colombian government is weighing the option of temporarily suspending its fiscal rule. This potential move, expected to be discussed at an upcoming Superior Council for Fiscal Policy meeting, could provoke unease in financial markets already wary of President Gustavo Petro's economic strategies.
The fiscal rule, established in 2011, aims to impose policy constraints to avoid the deterioration of public finances. If suspended, the government must set new targets and outline a timeline for resuming compliance, according to a source and local media reports.
Public Credit Director Javier Cuellar has indicated that the government will discuss the fiscal rule more comprehensively following the release of revised fiscal targets.
(With inputs from agencies.)
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