Colombia’s New President: Who Can Fix the Economy?

The choice of Colombia’s next leader will decide how the country tackles its tight budget and a split Congress. Two candidates present very different plans, but both face a tough fiscal road ahead. Abelardo De La Espriella is a lawyer who has never held office. He wants to shrink the state by 40 %, widen the tax base, and cut corporate taxes. He also plans to revive oil drilling, allow fracking to boost production, and take a stronger stance against guerrillas. Investors see his win as a chance to reverse the spending boom that followed former President Petro. Iván Cepeda, a left‑wing senator, aims to deepen Petro’s reforms. He would raise taxes on the richest people and big firms while keeping a ban on new oil and coal projects. He is open to gas and mining, but wants more social spending to fight poverty. Colombia’s growth after the pandemic has leaned on consumer spending, higher wages and public investment. Private business has been slow to return, especially in oil and mining. The economy grew 2. 6 % last year, below the pre‑COVID average of about 4 %. Private investment is still lower than before the pandemic, after a sharp drop in 2023.

The country’s debt sits at roughly 60 % of GDP. Analysts warn that weak tax revenue and high spending will make it hard to hit the 5. 3 % deficit target set for this year. To avoid default, the new president would need to cut spending by about $5. 6 billion in 2027 and $20 billion over four years, according to the Fiscal Rule Committee. Ratings agencies have already pulled Colombia into junk status after the government lifted limits on debt and spending. Even if De La Espriella wins, he may find limited support in a divided Congress, making deep fiscal changes difficult. Cepeda could struggle to pass revenue‑raising measures, as happened during Petro’s term. Beyond politics, the country faces uncertainty from legal issues, insecurity and extortion. These factors have pushed investors toward financial markets rather than productive projects. The new leader must restore confidence in macro‑economic stability and create a predictable environment for businesses. Many Colombian firms that once looked abroad are now re‑examining domestic investment, seeing a potential shift in policy. Energy projects would also need long‑term stability to thrive. In short, whichever candidate wins will inherit a budget crisis and an uncooperative legislature. Their success hinges on balancing reform with political realities.

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