Petro declares economic emergency in Colombia

The Executive points out that, with this declaration – which allows new taxes to be established or existing ones modified – it seeks to address the “material and legal inability to guarantee, in a continuous, timely and sufficient manner, the effective enjoyment of some material rights and the provision of essential public services” in the face of a “fiscal situation that has acquired a serious nature”.

The tax reform rejected on December 9 was the third of its kind presented by President Gustavo Petro’s government to Congress, which approved the first in 2022, months after he assumed the presidency, but rejected another in 2024.

Petro claims that Colombia has had a primary deficit in public finances since the government of Juan Manuel Santos (2010-2018).

“We have been presenting a primary deficit in public finances since the Santos government, but it was only during this government that the Banco de la República (Central Bank of Colombia) decided to set the real interest rate above the real growth rate of the economy. In doing so, it tried to stop economic growth with a false thesis about the causes of inflation, which decreased substantially during my government”, wrote the president in X.

“The Bank of the Republic did not behave like an independent central bank, but like the opposition”, accused Petro.

The opposition says that the deficit in public accounts was worsened by excess spending by the Petro government and filed an unconstitutionality action in the Constitutional Court against the decree that declared a state of economic emergency.

“The emergency cannot be used to correct planning errors or to impose by decree what Congress democratically rejected,” opposition senator María Fernanda Cabal said in X.

“The fiscal deficit and the rejection of a budget law are not unforeseen or unexpected events. It is now up to the court to protect the separation of powers and the pockets of Colombians, who were plundered by Petro’s socialist government,” he added.