Colombia’s public debt could climb 10% of GDP this year, official says

BOGOTA, Sept.11 (Reuters) – Colombian public debt could climb the equivalent of 10% of gross domestic product this year due to the coronavirus pandemic, the country’s comptroller said on Friday, warning that this could affect efforts to reduction of poverty and unemployment.

Gross public debt at the end of 2019 was 607.3 trillion pesos, or about 164.1 billion dollars, or 57.2 percent of GDP, according to figures from the Comptroller’s Office.

“We may experience a 10-year setback in progress on things like income distribution, increasing formal employment,” Carlos Felipe Cordoba said during a virtual event on the impact of the pandemic.

Latin America’s fourth-largest economy has been forced to seek billions of dollars in financing by issuing bonds and securing loans from organizations such as the Inter-American Development Bank amid increased demand for resources during a lockdown. COVID-19.

He was also forced to abandon his plans to continue reducing his budget deficit. The government forecasts that the economy will contract by 5.5% this year and that the central government deficit will reach 8% of GDP.

“The challenge for medium-term fiscal policy is to reorient public spending to increase production capacity, diversify production and increase the productivity and competitiveness of the economy,” Cordoba said. “It’s a big challenge. (Reporting by Luis Jaime Acosta; Writing by Julia Symmes Cobb; Editing by Will Dunham)

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