Micah Jonah, April 8, 2026.
Colombian President, Gustavo Petro has announced plans to submit an economic emergency decree, a new tax reform bill to Congress to balance the 2026 budget. He warned that if Congress does not approve the proposals, he will implement them by decree.
In a televised address, Petro said the government may declare a new economic emergency to protect the standard of living, which he described as higher than at any previous time. He instructed the interior minister to present a tax reform bill, though the expected revenue from the measures was not specified.
The move comes amid tensions with the central bank. Finance Minister, German Avila resigned from the board last week after disagreements over raising the benchmark interest rate by 100 basis points to 11.25 percent. Analysts say it is unlikely the current Congress, whose term ends in June, will approve Petro’s proposals.
Colombia recently held elections for a new Congress, which will take office on July 20 after the presidential election determines the new head of state. Citizens are scheduled to vote in late May, with a potential runoff in June if no candidate achieves a majority.
Last year, Petro declared an economic emergency after Congress rejected a tax reform bill aimed at raising 16.3 trillion pesos or about $4.45 billion. The 2026 budget of 546.9 trillion pesos falls short of the government’s fiscal needs, prompting Petro to push new measures. Earlier this year, the constitutional court provisionally suspended the previous economic emergency, which sought to raise 11 trillion pesos to finance part of the budget.
Colombia’s fiscal accounts have been under pressure, leading the government to suspend a fiscal rule limiting the deficit. Petro’s latest announcement highlights the administration’s focus on stabilizing the economy, protecting living standards amid fiscal challenges.
