Latin America's fourth-largest economy is experiencing growing fiscal difficulties that have led to debt levels exceeding 60% of GDP and jeopardizing compliance with the country's fiscal rule.
Colombia will seek new sources of financing internationally, both through markets and multilateral banks, to alleviate the fiscal deterioration, Finance Minister Germán Ávila said Friday, adding that an upward revision to the economic growth forecast is likely.
"We are indeed opening conversations with other sectors of the international markets, both in Europe and the Middle East, as well as in Asia. We are open to all possible scenarios to seek alternative sources of financing," Ávila told reporters on the sidelines of the pension fund congress of the Asofondos association in Cartagena.
"And also to ensure that Colombia opens up to global markets, that it has a much broader portfolio of interactions with the world's multilateral banks, because we have tended to narrowly focus that dialogue with financial markets," he added.
Latin America's fourth-largest economy is experiencing growing fiscal difficulties that have led to debt levels exceeding 60% of GDP and jeopardizing compliance with the country's fiscal rule.
"It will surely be necessary to seek new markets, new opportunities that will allow us to convert the most expensive debt the country currently has," he said, without providing details, "always ensuring that we maintain reasonable rates and terms."
Ávila added that while tax collection figures for the first quarter were 700 billion pesos (US$168.8 million) above the target for that period, "we need to increase it much more," while reiterating that he does not rule out further spending cuts as a strategy to tighten public finances.
Additionally, Ávila noted that the country's economic growth forecast for this year will "probably" be adjusted to 2.8%, from a previous estimate of 2.6%.
If the revision is finalized, it would be in line with the change announced on Monday by the Central Bank's technical team following the monetary policy meeting in which the bank's board held its benchmark interest rate steady at 9.50%.
