The government's fiscal problem is what makes housing more expensive than ever for households: experts to Petro
The increase in the cost of public debt in TES is affecting the country's economy. Photo: iStock
TL;DR
- Colombian Treasury Bonds (TES) are experiencing rates close to 14%.
- President Petro blames nominal interest rates, which include inflation (5.3% annually), while experts argue for the role of real rates and government fiscal policy.
- Experts like Felipe Campos state that government debt rates have been rising for two years, while the Central Bank's real rate remains around 3%-4%.
- Colombia is facing an unprecedented situation with a soaring country risk and consecutive fiscal rule breaches.
- The government received significant revenue from previously approved tax reforms but still faces projected deficits.
- Experts argue that the government's decision not to cut spending and instead seek scapegoats during economic deceleration is an easy way out.
- The current debt levels of TES are the highest seen since 2004, significantly increasing real financing costs.
- The Minister of Finance, Germán Ávila, maintains that the increase in borrowing costs is primarily due to the Central Bank's decisions on interest rates.
- The Ministry of Finance claims that debt as a percentage of GDP has been reduced from a peak of 60% to around 58%, suggesting normal debt management operations.
- Concerns are raised that the increase in interest rates on public debt may benefit certain sectors while structurally harming the country.