Colombia: A narrower print, not a better trajectory

Research evidence excerpt

Colombia: A narrower print, not a better trajectory

he only line posting real gains in April.

Seasonally adjusted, three‑month annualized momentum has deteriorated sharply, falling to

-28.8%3m/3m, ar from -18.1% in 1Q26 and +8.4% in 4Q25. Recent real gross tax collection

momentum is weaker than we had anticipated. Our base case remains that revenues as a share

of GDP will be broadly flat this year, with risks slightly skewed to the downside.

On the expenditure side, execution data through May point to an acceleration in spending and

persistent pressures: execution excluding debt service reached 31.3% through May. This

pace is slightly above the historical average, and significantly above the 28.7% average

observed under the Petro administration (2023–25). In addition, committed spending

(approved but not yet executed) rose to 46.0% from 43.0% in May 2025, implying that a

meaningful share of spending is still likely to materialize over the remainder of the year

(3.35% of GDP in our estimates). Budget backlog execution is adding further pressure,

though smaller than in 2025: close to 75% of the backlog has already been executed,

contributing roughly 1.8% of GDP in additional spending to the 2026 Budget.

Our primary deficit fiscal proxy is tracking 0.8% of GDP thorugh May, compared to 1.0%

in the same period last year. While waiting for any revised fiscal projections from the

incoming administration and the debate around the 2027 Budget, we have trimmed our

full‑year primary fiscal deficit forecast to 3.2% of GDP.

MTFF: Optimistic assumptions, misaligned with the fiscal reality

The administration’s 2026 MTFF presents fiscal and financing projections that, in our view,

do not square with the underlying fiscal situation. The MTFF projects a GNC primary deficit