The Covid-19 pandemic and the policy response to mitigate its effects led to a substantial deterioration in the Central National Government’s finances. In 2020, the deficit of the CNG stood at 7.8% of the GDP, a figure that was more than three times higher than in 2019. This increase was due to the higher spending to mitigate the effects of the pandemic and the downturn in economic growth, which brought about a sharp drop in tax revenue. With the pandemic extending into 2021, social programs’ spending to address the pandemic continued. Moreover, the government is increasing public investment in infrastructure as a strategy to boost economic growth and employment, which is why the Financial Plan assumes that the CNG’s fiscal deficit will climb to 8.6% of the GDP in 2021. The larger fiscal imbalance has implied a significant increase in the CNG's gross debt, which went from 50.3% to 64.8% of the GDP between 2019 and 2020. In 2021, the abovementioned deficit could lead to a significant additional increase in this indicator. [+ info, only in Spanish]
Direct Credit from the Central Bank to the Government (Only in Spanish)
Publication date
Subscribe!
Sign up and get first-hand access to economic opinion blogs.
Must reads
About our Blog
In each publication you will find easy-to-read articles related to the Colombian and global economy and the actions taken by Banco de la República.
 |
Jorge Toro |
Blog articles are for information purposes only. The opinions expressed and possible errors are the sole responsibility of the authors and do not imply any commitment on the part of Banco de la República or its Board of Directors.
