Congress approves 2024 budget number, ignoring CARF warning

COLOMBIA - In Brief 14 Sep 2023 by Andrés Escobar Arango
On September 13, the economic committees of Congress approved the size of the 2024 budget at COP 502.6 trillion (29.6% of GDP), leaving the amount submitted by the Finance Ministry back in July unchanged. From now until mid October, the plenaries of the House and the Senate will continue to discuss the budget, but won’t be able to modify the amount already approved. In a press conference held after the vote, Deputy Finance Minister Guevara highlighted that the amount approved is consistent with both the Fiscal Rule (FR) and the Medium-Term Fiscal Framework (MTFF). Even though voting a budget size in line with the MinFin’s proposal tends to be the norm in Colombia, this time around there is reason for concern. Back in July, the Autonomous Committee of the Fiscal Rule (CARF) issued a warning saying that the fiscal numbers in the MTFF for 2024 were not consistent with the FR and asked the MinFin to submit a compliant (i.e., smaller) budget for next year. The MinFin decided to ignore the warning and, unfortunately, so did Congress. Yesterday’s vote does not mean Colombia is already in breach of the FR limits for next year. Compliance with the FR, or lack thereof, is not an ex-ante but an ex-post issue. In other words, we have to wait until April or May 2025 for CARF to send its official report to Congress on whether the National Central Government complied with the FR in 2024. However, the fact that Congress, in spite of the numerous debates in which the CARF warnings emerged, decided to approve the MinFin’s version, is a first since the FR was implemented back in 2012. President Petro has made the legitimacy of the CARF a political issue. With yesterday’s vote Congress ha...

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