Colombian Finance Minister Resigns Amid Budget Disputes with President Petro
Colombian Finance Minister Diego Guevara resigned after disagreements over budget cuts and following the rejection of a labor reform by President Gustavo Petro. His departure, after just over three months in office, raises concerns about Colombia’s public finances and political stability. German Avila is poised to replace Guevara, though analysts question his experience in finance management.
Colombian Finance Minister Diego Guevara announced his resignation on Tuesday, following disputes regarding budget cuts and shortly after the rejection of a labor reform proposed by President Gustavo Petro. Guevara had served in this position for just over three months, emphasizing the instability surrounding Colombia’s public finances.
In a statement shared on X, Guevara described his conversation with President Petro as “calm and friendly,” yet did not specify the reasons for his departure. Sources indicate that disagreements over budget cuts led to his resignation late on Monday night.
President Petro, who is the first leftist leader of Colombia, has recently made significant changes to his cabinet, replacing 12 out of 19 ministers. Reports suggest that German Avila, the current head of Grupo Bicentenario, will succeed Guevara. However, analysts from Banco de Bogota expressed concerns regarding Avila’s qualifications to manage public finances effectively.
Banco de Bogota further noted that frequent cabinet changes and the profile of the new minister could contribute to increased political and economic instability. The recent shifts in the finance ministry may also cast doubt on anticipated reductions in the central bank’s benchmark interest rate. The Colombian peso experienced a slight decline, closing down over 1% against the U.S. dollar, which stood at 4,118.
This month, Guevara indicated the government’s consideration of further delaying budget expenditure as a response to ongoing fiscal challenges that already necessitated spending cuts.
In summary, the resignation of Finance Minister Diego Guevara has highlighted the tension regarding Colombia’s budget management amidst President Gustavo Petro’s transformative agenda. The appointment of German Avila raises concerns over his ability to stabilize the nation’s finances, and the ongoing cabinet purges may exacerbate political and economic instability. Such uncertainties could hinder efforts to adjust interest rates and manage fiscal policy effectively.
Original Source: theprint.in
