Package of Economic Measures to Restore Growth in Colombia

The Colombian government has presented a package of economic measures to recover growth in the country. President Gustavo Petro announced in his social networks that “a package of measures is being prepared in order to achieve full economic reactivation”. In addition, the head of state specified that “the measures will be presented to the Congress of the Republic in the coming days”.

Among the little that has transpired, it is known that the government will present in 2025 a “reform” to the tax reform that came into effect in 2023. With this new reform, according to the Minister of Finance, Ricardo Bonilla, the corporate income tax would be lowered for companies, something very much demanded by the business associations in Colombia. Currently, this stands at 35% and is among the highest worldwide.

Extraordinary council of ministers

This announcement comes a few hours after the extraordinary council of ministers held last weekend in Boyaca. In this meeting, which lasted 48 hours, the full government and the president reached a series of conclusions after the significant opposition protests that occurred in the streets on April 21.

After the meeting, Laura Sarabia, head of the Administrative Department of the government, Luis Fernando Velasco, Minister of the Interior and Alexander Lopez, director of the National Planning Department, highlighted in a press appearance the economic “achievements” of the country in the last year and a half.

In this regard, Alexander Lopez insisted that “progress has been made in the economic growth of our country in a sustainable manner.” In addition, Lopez said that “we have managed to reduce unemployment rates and we have also managed to lower inflation in a way that other countries in the region have not done.”

The recovery of the value of the Colombian peso in the last twelve months also demonstrates, for the government, the strengthening of the national economy. The director of the National Planning Department also pointed out that the labor reform that will soon be discussed in parliament is aimed at favoring formal employment, with health and pension contributions, removing three million workers from informality.

Economic recovery in 26 months

Among the package of economic measures that will soon be presented to Congress are the decisions that will be aimed at consolidating the economic recovery in the next 26 months, which are the remaining months of this government before the legislative and presidential elections of 2026.

In this regard, one of the government’s objectives is to consolidate the decrease in inflation, after several months of significant decreases. The Executive is working with the idea of placing the CPI around 5% at the end of the year, and above 3% by the end of 2025.

Economic growth, the great thorn in the economy’s side, will seek to facilitate business activity, after the drops in the price of money, something that the central bank already started at the end of 2023 and which is expected to continue strongly throughout this year.

Budget execution for “social change” in Colombia

One of the key points of the extraordinary government meeting was the budget execution of the Executive, which is among the lowest. In the conclusions of the meeting, it was stated that “it was requested to report and upload the budget execution on a regular basis,” and it was reiterated that “the ministries and directorates are executing the allocated resources in an effective, strategic and planned manner”.

Along the same lines, the members of the extraordinary government meeting discussed the budget for 2025 and “the dates of the goals were set and the legacies that the national government plans to leave in 2026 were presented.” Emphasis was also placed on “the need to strengthen communication around the progress and achievements” of the Executive, as well as “the commitment to work as a team and advance in the social change set forth in the program.”