Colombia’s foreign debt, measured in relation to economic output, inched higher in July from a year earlier, fueled by an increase in private-sector bond sales.
Colombia’s total foreign debt, including the government and the private sector, stood in July at 21.1% of gross domestic product, the central bank said Wednesday. The figure marks a slight increase from the same month a year earlier, when it stood at 20.8% of GDP.
The country’s total foreign debt increased despite a decline in public sector debt, which dropped to 13.3% of GDP from 14.3% a year earlier. Private sector foreign debt, meanwhile, climbed to 7.8% of GDP from 6.5% in July 2009.
The country’s total foreign debt in July came in at $60.54 billion, a 24.7% increase from a year earlier. The government’s foreign debt was $38.1 billion, a 14% jump from a year earlier.
The country’s debt measured in relation to GDP, however, only moved slightly higher thanks to faster economic growth. After posting a tepid 0.8% economic expansion last year, the country grew 4.5% in the second quarter of the year.
Finance Minister Juan Carlos Echeverry has said that the economy could grow between 5% and 6% this year.
The government has already tapped its limits for foreign debt sales this year, but could issue bonds to finance its 2011 budget.
Colombian bonds have benefited from an improved domestic economic outlook and the possibility that they may soon be granted investment-grade status by credit-rating agencies. (Darcy Crowe / Dow Jones Newswires)
President Juan Manuel Santos is pushing a legislative package through Congress that could rein in the country’s fiscal deficit, one of the main hurdles for Colombia to obtain the coveted investment-grade status that was lost a decade earlier.
The central government deficit, which excludes state-owned companies and local governments, is expected to close the year at 4.4% of economic output. For 2011, the government estimates it will drop to 4.1%. The Santos administration has said that one of its main policy goals is to reduce the central government’s deficit to 1.5% in four years.