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Colombia government proposes $89.8 bln 2022 budget to Congress

Credit: REUTERS/HENRY ROMERO

Colombia's government on Thursday formally proposed to Congress a 2022 budget of 350.4 trillion pesos ($89.8 billion), 5.3% higher than this year's, the Finance Ministry said.

By Carlos Vargas

BOGOTA, July 29 (Reuters) - Colombia's government on Thursday formally proposed to Congress a 2022 budget of 350.4 trillion pesos ($89.8 billion), 5.3% higher than this year's, the Finance Ministry said.

This year's budget was already the largest in the Andean country's history before it was bulked up in January to more than 332 trillion pesos - some $85.2 billion - to meet needs arising from the coronavirus pandemic.

The bill, which must be approved by Congress before Oct. 20, includes proposed investment of 62.2 trillion pesos in 2022, up 6.2% on 2021 investment forecasts.

"Thanks to these efforts it will be possible to keep GDP growth above 4% in 2022 and to reduce poverty from 42.5% in 2020 to 36.8% in 2022," Finance Minister Jose Manuel Restrepo said in a statement.

The budget is predicated on an economic growth target of 4.3% for 2022, compared with a forecast expansion of 6% this year, and uses a fiscal deficit target for 2022 of 7% of gross domestic product.

The proposal allocates 210.1 trillion pesos for government operating costs, 3.1% more than this year, while proposed debt payments would rise 10.6% to 78 trillion pesos.

The government would also allocate 51.9 trillion pesos for pensions, with 49.3 trillion pesos for education, 41.9 trillion pesos for defense, and 41.2 trillion pesos for health.

The government of Latin America's fourth-largest economy is also pushing a $3.9 billion tax reform bill to legislators, even after street protests and lawmaker opposition scuppered the reform's original iteration.

The government of President Ivan Duque insists the tax law is vital amid rising debt, an expanding fiscal deficit, investor worries and pressing social needs.

($1 = 3,902.18 Colombian pesos)

(Reporting by Carlos Vargas Writing by Julia Symmes Cobb Editing by Leslie Adler)

((julia.cobb@thomsonreuters.com; +57-316-389-7187))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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