Congressional Approval Of Fiscal Reform Will Help Narrow Colombia's Deficit In 2022

• Fitch Solutions forecasts that Colombia’s budget deficit will be 8.2% of GDP in 2021, a multi-decade high, due to ongoing fiscal stimulus measures to counteract the economic impact of the COVID-19 pandemic. 
• The deficit will narrow to 6.8% in 2022 and continue to shrink in the years thereafter as economic growth revenue-positive reform measures support government revenues. 
• That being said, the potential for an ideological shift following Colombia’s 2022 elections will increase uncertainty for the country’s medium-to-long term fiscal outlook, particularly if leftist candidate Gustavo Petro wins the presidency.

(Source: Fitch Solutions)