Fitch Sees Deficit Cut in Colombia, Spending Pressures Persist

Fitch Ratings fiscal forecast for Colombia point to sizeable deficit reduction this year, “but social spending pressures will persist, high inflation will add to spending pressures via indexation, and the forecast sharp slowdown in growth will weigh on revenues,” analysts Richard Francis and Mark Brown wrote in a note.

• Data released at the end of March show the 2022 government deficit at 5.3% of GDP, somewhat lower than the 5.5% budgeted
• “We maintain our general government (GG) estimate of 6.7%, which includes spending on the fuel subsidy although there could be some overperformance at the GG level as well”: ...