BOGOTA (Reuters) -Colombian Finance Minister German Avila said on Friday that “paralyzing” the economy to comply with the country’s fiscal rule is not an option and that the government will take steps, including increased borrowing, if needed to ensure growth.
His remarks follow news that Colombia may temporarily suspend compliance with the fiscal rule governing government finances.
“Paralyzing the state and the economy to comply with the fiscal rule is not the way forward,” Avila told a banking conference in Cartagena.
“It is possible we will make some adjustments in spending, we are examining them,” Avila said, adding there will be adjustments to the country’s debt and “surely we will not reach the limits established by the fiscal rule.”
Any decision to suspend the rule, created in 2011 to implement policy constraints that prevent the worsening of public finances, would roil markets, which are already deeply wary of President Gustavo Petro’s economic management.
The proposal will be discussed at a Monday meeting of the Superior Council for Fiscal Policy, which is charged with managing the country’s budget, among other fiscal duties, Avila confirmed on Friday.
(Reporting by Nelson Bocanegra; Writing by Brendan O’Boyle; Editing by Leslie Adler)
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