October 3, 2018 |
President Iván Duque took office in August with a challenge: fulfill his promise to cut taxes while balancing the budget to trim deficits and keep the country’s investment-grade rating.
He had campaigned on the need of lower taxes to spur corporate investments and employment. But critics worry that approach could be at odds with reaching the fiscal stability Colombia has mandated for itself, and that markets are looking for.
Including new tax cuts in the mix could be tricky. After reaching a budget deficit of 3.6% of GDP in 2017, Colombia has stated a goal to trim it to 3.1% of GDP this year and 2.4% in 2019.
In fact, despite IMF forecasts that the country’s GDP will grow 2.7% this year,
With a fiscal plan in the works, Colombia’s new government looks to balance fiscal prudence and stimulate economic growth.