Uncertainty Surrounds Colombia’s Finance Minister Amid Government Tensions

Colombia’s Finance Minister, Diego Guevara, may resign over disagreements with President Gustavo Petro regarding budget cuts. The finance ministry has not confirmed this change. Analysts fear that the leadership change could worsen political and economic instability amid ongoing fiscal challenges. The Colombian peso fell in response to these developments.

Colombia’s Finance Minister, Diego Guevara, is reportedly poised to leave his position amid discord with President Gustavo Petro. Despite local media assertions and insider sources affirming Guevara’s pending departure, the finance ministry stated, “at this time it does not have official information about the reported situation,” pledging to issue official communications as appropriate. Guevara has held his post for a little over three months, having previously served as the vice finance minister.

Insights from a source within the presidential palace indicate that Guevara’s resignation stemmed from disputes over budget adjustments, following President Petro’s recent reshuffle, where he replaced 12 out of 19 ministers. However, another source from Petro’s office contended that Guevara remains in his role, suggesting the matter is not yet finalized. Reports from local radio station Caracol speculate that Grupo Bicentenario’s head, German Avila Plazas, may succeed Guevara.

Analysts interpret Guevara’s potential exit as exacerbating the uncertainty surrounding Colombia’s strained public finances. Banco de Bogota has cautioned that frequent cabinet changes and the profile of the incoming minister could exacerbate political and economic instability. The bank also hinted that this situation might complicate anticipated interest rate cuts by the central bank later in March. Consequently, the Colombian peso fell by 1.08% on Tuesday, trading at 4,118 per dollar.

Earlier this month, Guevara indicated that the government is contemplating another delay in budget planning for 2025 due to ongoing fiscal challenges that have necessitated prior spending cuts.

In summary, the potential departure of Finance Minister Diego Guevara illustrates rising tensions within the Colombian government, particularly concerning budget management under President Petro. With uncertainty surrounding the ministerial transition, analysts express concerns over the implications for Colombia’s fiscal stability. The situation may result in heightened political and economic instability, as reflected by the recent depreciation of the Colombian peso and speculation on interest rate modifications.

Original Source: theprint.in