Colombia: An uneasy fiscal handoff

Research evidence excerpt

Colombia: An uneasy fiscal handoff

J P M O R G A N Latin America Economic Research

15 July 2026

Colombia

An uneasy fiscal handoff

Emerging Markets Economic and

Policy Research

Juan Goldin

(57 601) 869 8746

juan.goldin@jpmchase.com

BANCO J.P. MORGAN COLOMBIA S.A

• DIAN’s high‑frequency data point to ongoing weakness in real gross tax Diego W. Pereira

collection through May, down by -1.6%oya in the last three months

(1-212) 834-4321

• Execution data through June, which is running above the historical diego.w.pereira@jpmorgan.com

average, point to faster spending in 2Q J.P. Morgan Securities LLC

• Our primary-deficit proxy is tracking 1.3% of GDP through June, versus

1.4% over the same period last year

• The Treasury cash position has improved in 2Q26, on the back of heavier

local-currency issuance

• We estimate a sizable financing gap through year‑end, implying that the

incoming administration will need to increase debt issuance

The incoming administration will inherit a treacherous fiscal starting point. The

primary deficit has widened to levels last seen during the 2020/21 pandemic shock

and the late‑1990s period, reaching 3.5% of GDP last year and, in our view, likely

remaining near that level in 2026. In addition, below-the-line arrears that we

believe need to be recognized could add at least 2.0% of GDP in additional

spending pressures, including underestimated health outlays and a growing stock

of obligations to energy companies. Meanwhile, tax collection remains stagnant

with risks tilted toward further softening, and execution data suggest spending

pressures accelerated in 2Q and remain inconsistent with a sustainable fiscal path.

As we highlighted in a recent note, we continue to view a meaningful fiscal