The Colombia government posted a consolidated budget deficit of 1.27
trillion Colombian pesos ($644 million) or the equivalent to 0.2% of
gross domestic product during the first quarter of the year as the
country’s tax collection grew more slowly than spending because of the
In the first quarter of last year, the government’s consolidated budget ended with a surplus of 0.6% of GDP.
The ministry attributed the higher deficit to higher spending of
the Colombian central government, which incurred a deficit of 0.6% of
GDP, compared with an equilibrium in the first quarter of last year.
The central government’s data exclude profit and losses from
state-owned companies and local governments.
“The economic slowdown is reducing tax collection but spending of
the government doesn’t diminish at the same pace,” said Cesar Tovar,
head of research at local brokerage Nacional de Valores.
The government recently revised downward the expected tax
collection for this year to COP68.19 trillion, from a previous forecast
of COP73.14 trillion and much lower than the initial expectation of
Meanwhile, the budget surplus of towns and provinces narrowed to
0.2% of GDP in the first quarter of the year, down from 0.6% of GDP in
the same period last year.
The consolidated budget includes profits and losses from
state-owned companies and deficits or surpluses of local governments.
The Colombian government recently increased the budget-deficit
forecast for 2009 to 2.4% of GDP from a previous 2.3% as the economy
was initially expected the economy to grow between 0.5% and 1.5%. The
government now expects the economy to grow 0.5% this year.
This year’s projected consolidated budget deficit compares with a 0.1% deficit reported in 2008.
The Colombian economy fell 0.6% in the first quarter of the year
after a contraction of 1% in the fourth quarter of last year. (Dow Jones)