Fitch forecasts Colombia's fiscal deficit could approach 7% of GDP by 2026
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On August 18, 2026, Fitch Ratings analyst Richard Francis warned that Colombia's 2026 fiscal deficit is expected to approach 7% of GDP, despite an official government target of 6.2%. The warning followed a December 2025 downgrade of Colombia’s credit rating to BB, placing the nation further into speculative territory. New President Abelardo De la Espriella, who took office on August 7, 2026, is currently managing a 557 trillion peso budget designed by his predecessor, Gustavo Petro. The fiscal pressure is compounded by the suspension of the country's fiscal rule, which was enacted under the Petro administration and is set to remain inactive through 2027.
Consequences
With the fiscal rule suspended, the government faces limited institutional guardrails to curb rising public debt, which is trending toward 63% of GDP. President De la Espriella must now navigate these structural deficits while attempting to execute a tax overhaul to address the fiscal challenges inherited from the previous administration.
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