In its first year in power, the government of Gustavo Petro has faced a series of economic challenges that set the direction of the country’s financial policy. Despite an optimistic start due to the arrival of José Antonio Ocampo as Minister of Finance, the market experienced turbulence due to the implementation of certain measures.
During the first months of the government, the tax reform was implemented, which allowed the collection of close to $20 billion destined to finance social programs.
The Government also made decisions related to the hydrocarbons industry, generating uncertainty in the market regarding the signing of new exploration and exploitation contracts. But what worries citizens the most is the price of gasoline, which has been increasing in recent months due to the need to solve the deficit in the fuel stabilization fund, which currently registers a gap of 37 billion pesos. .
Since October 2022, a gallon of gasoline has gone from costing around $9,380 to 13,564 pesos. In other words, in less than a year, the increase exceeds $4,000.
According to the president of the republic, Gustavo Petro, the objective is to reach the international price of gasoline and, once achieved with a small surplus to pay the generated debt, it will stop rising.
Likewise, measures were applied to control the outflow of capital. In addition, it issued bonds to finance the victims of the armed conflict, decisions that generated confusion in some economic sectors of the country.
On the other hand, in the first half of 2023, Colombia experienced an economic slowdown with a 0.78% drop in the Economic Monitoring Indicator (ISE) compared to the previous year. This situation was reflected in a decrease in the country’s economic activity.
Between the month of May last year and May 2023, inflation was 12.36%. Although in the last two months it has remained downward, which could lead the Banco de la República to also start reducing reference interest rates. In turn, inflation is expected to reach 9% before the end of 2023.
Regarding the labor market in Colombia, it fell two percentage points in the last year and was in single digits, something that had not happened since 2019. The most recent DANE report revealed that the unemployment rate dropped to 9.3% .
Regarding the dollar, the foreign currency has undergone a downward correction. In July 2022, the dollar was at $4,300, but by November of the same year, it surpassed the $5,000 barrier. However, in recent weeks it has shown a downward trend and today, it is trading at $4,077.
Despite certain economic achievements, the Petro Government faced criticism due to the low execution of projects.