Colombia's left-wing government cut poverty but is leaving a heavy debt pile
The Petro administration cut Colombia's poverty rate to 32 percent while the fiscal deficit climbed above 6 percent of GDP. The next president will have to manage that debt without unwinding social gains.
Colombia's poverty rate has fallen roughly six percentage points to 32 percent since Gustavo Petro took office in 2022, according to national statistics agency DANE. Economists who spoke to Al Jazeera attributed the decline to higher minimum-wage adjustments, expanded cash transfers and pension reform. According to the finance ministry, the fiscal deficit has climbed above 6 percent of GDP and the 2026 borrowing programme has been revised to about $35 billion.
Luis Fernando Mejía, director of think tank Fedesarrollo, warned that 'debt service will sharply narrow the next administration's room for manoeuvre.' Marc Hofstetter of Universidad de los Andes told the broadcaster that external financing conditions had tightened, citing recent talks with central-bank counterparts in Bogota. A Goldman Sachs note estimated that long-dated Colombian peso yields have risen roughly 90 basis points over the past six weeks.
Markets are likely to focus on fiscal-discipline rhetoric from leading candidates ahead of the May 2026 presidential vote. Among politicians, debt restructuring and pulling back social spending are both polarising options. This article is not investment advice.
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