COLOMBIA: S&P Sent Warning Message About Budget Deficit, Says Minister

Colombian Finance Minister Mauricio C?rdenas said that following the Standard & Poor’s decision to downgrade Colombia’s credit rating from BBB to BBB-, the rating agency sent a message warning on the importance of keeping on the path of reducing the fiscal deficit.

C?rdenas said that the Colombian administration should continue working “firmly for macroeconomic stabilization.”

The official emphasized that the country must keep on increasing tax revenues and promoting spending cuts.

“This is the message that the rating agency is sending with its announcement today, which is a warning signal so that subsequent fiscal decisions, from 2019, will continue on the path we have set,” he said.

According to C?rdenas, the government’s commitment is to boost investors confidence.

“The country has already taken most of the necessary measures to stabilize the economy: the tax reform of a year ago, the interest rates increase to lower inflation and the peso devaluation to close our trade deficit,” the minister said.

S&P justified its decision, among other aspects, in the uncertainty generated by next year’s elections and in doubts about the ability of the next government to comply with the fiscal rule after 2019.

“This invites us to think with great responsibility, in the upcoming political debate, in what should be the formulas of fiscal policy during the coming years,” said the official.

The material has been provided by InstaForex Company – www.instaforex.com