Colombia Congress approves 2027 budget as fiscal strains deepen

BOGOTA, Sept 14 (Reuters) - Colombia's ‌Congress on Monday ​approved ​the government's 2027 spending budget of 634.9 trillion pesos ($206.6 billion), amid a sharp deterioration in public finances that is expected ‌to push the fiscal deficit to a record high next ⁠year.

The Senate and lower house approved the bill after lawmakers sent back an initial ‌proposal, allowing the recently inaugurated ‌government of right-wing President Abelardo De La Espriella to incorporate additional funding needs, including those arising from the 7.4-magnitude earthquake that struck the ​country in August.

“This is not the budget we would have liked to start our term with, but it is the budget we ⁠can afford given the current state of the national economy,” Finance Minister Miguel Gomez told Congress ​on Monday.

The budget projects a record fiscal deficit of 9.4% of gross domestic product (GDP), which will have to be ​financed largely through an increase in public ‌debt.

But De La Espriella's government plans to submit a tax reform package known as the "Rescue Law," aimed at ⁠reducing public spending next year in an effort to lower the fiscal deficit to 7.2% of GDP, the same level projected for 2026, Gomez has said.

Juan Carlos ⁠Ramirez, the head of the Independent Committee for Fiscal Rule Management (CARF), told Reuters in ​late August that Colombia would face a more critical public finance situation if the 2027 budget as proposed by the government was approved.

President De La Espriella said ‌in a speech on Sunday that the country's fiscal situation is critical and blamed the government of his ‌predecessor, leftist Gustavo Petro, for the deterioration, which he said stemmed from corruption ⁠and the misuse of resources, ‌though he did not ​provide any evidence for his claims.

($1 = 3,072.27 Colombian pesos)

(Reporting by Carlos Vargas; Writing by Julia Symmes Cobb; Editing by ‌Kylie Madry)

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