Colombia’s government has unveiled a proposed budget of 523 trillion pesos ($130 billion) for 2025, reflecting a significant increase from this year’s 483 trillion peso budget, which had been reduced by 20 trillion pesos in June. The new budget proposal comes as President Gustavo Petro faces mounting fiscal challenges and aims to drive economic reactivation during the second half of his term.

The proposed budget focuses on key sectors such as health, education, and infrastructure, aiming to stimulate economic growth and meet fundamental spending objectives. “This is a budget that bets on economic reactivation,” said budget director Jairo Bautista at a press conference.

The 2025 budget outlines operating expenses of approximately 327.9 trillion pesos, debt service funds of 112.6 trillion pesos, and investments totaling 82.4 trillion pesos. The finance ministry has aligned the budget with the government’s targets for next year, including an economic growth rate of 3% and a fiscal deficit of 5.1% of GDP, as detailed in a mid-term framework released last month.

To fund the ambitious budget, the government plans to seek an additional 12 trillion pesos through a new financing law, which will be presented to Congress. This move highlights the ongoing fiscal pressure and the need for legislative support to secure the necessary funds.

The finance ministry also intends to propose legislation to expedite certain fiscal changes originally set for 2026. This proactive approach aims to address potential fiscal shortfalls and stabilize national debt in light of tax collection challenges.

Despite these efforts, the autonomous fiscal committee, CARF, recently warned that Colombia might require further fiscal adjustments to comply with fiscal rules and stabilize debt. The government’s ability to navigate these fiscal constraints will be crucial as President Petro advances his economic and social agenda.