Legislative Gridlock, Deteriorating Security Landscape Raise Political Risks In Colombia

• Fitch Solutions have become far more downbeat about the prospects for Colombian President Gustavo Petro’s reform programme in 2023 due to a series of legislative failures and a deteriorating security situation in the past several months.
• March has been a month of negative political developments for the sovereign, including the non-support of the new political and health bill by the legislative body.
• Additionally, Peru's government announced the "definitive withdrawal" of its ambassador from Colombia amid diplomatic tensions between both countries. The decision responds to "repetitive interventionist and offensive comments" from Colombian President Gustavo Petro, Peru's foreign ministry said in a statement.
• Based on the dampening political outlook, Fitch revised its Short-Term Political Risk Index (STPRI) score from 62.9/100; to 61.7, reflecting lower scores for the ‘policy-making process’ and ‘security /external threats’ components.
• Despite the dampened outlook, Colombia still ranks above the average STPRI score for the six major markets for the region. Notably, Chile ranks first, above Colombia, with a headline score of 64.6, while Mexico’s in second place, scoring 62.9. These are followed by Brazil (51.5), Argentina (50.8), and Peru (43.8).

(Source: Fitch Solutions)