Colombia’s worrying budget execution in 2023

In 2023, the execution of the budget has been low, even though additional money was requested and tax collection was sought to be increased.

Through Law 2276 of 2022, an initial budget of COP $405.6 billion was established for 2023. Additionally, in the first half of this year, a modification was made that increased the amount by COP $285 billion.

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In addition, during the first semester of 2023, a budget addition of COP $16.9 billion was approved to PGN 2023, which raised it to $422.5 billion, which has not been taken into account in the reports submitted by the Ministry of Finance and Public Credit.

It is important to clarify that the 2023 budget corresponds to what was programmed by the previous government and does not fully reflect the priorities of the current government’s Development Plan. In fact, many of the expenditures were determined by the previous administration.

However, it is worrisome that, despite efforts to increase available resources, the capacity of the entities to execute the projects and programs contemplated in the budget remains so limited.

Budget execution: emphasis on debt repayment and government operations

Budget execution figures up to July, presented by the Ministry of Finance and Public Credit, show that only 57.5% of resources have been committed and payments made were 47.4%.

When looking at the budget execution without debt, as of July, 55.5% of resources had been committed and 43.5% of operating and investment resources had been paid.

Of the operating appropriations, 54.2% of the resources were committed and 46.7% of the total appropriations were paid.

Of the appropriation for debt service, 65.9% was committed, 65.7% was obligated and 63.7% was paid.

Of the final investment appropriation, 59.8% was committed, 33.6% was obligated and 32.5% was paid.

Historically, the budget appropriation has been subject to multiple factors, including debt obligations, operating expenses and investment projects.

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Infrastructure, one of the sectors neglected in terms of investment

The distribution and execution of the budget has been biased towards bureaucratic operations, the maintenance of the State and debt payment, and the investment needed in infrastructure, education and research, among others, has been relegated.

Current appropriations for 2023 left resources for COP $253.7 billion for operations, COP $78 billion for debt service and COP $74.2 billion for investment.

One of the main consequences of this execution is the limited capacity to boost economic growth and improve the quality of life of citizens.

According to the Center for Labor Studies, the low budget execution also has to do with the changes in the payroll of the main entities, the lack of definition of many government programs and the inexperience of many of the civil servants.

For its part, Corficolombiana stated that the execution of the budget under these conditions has not played an important role in reactivating the economy, promoting employment and fostering production.

In particular, there are delays in the construction of key infrastructure, uncertainty as to the cost of reforms, and a loss of confidence on the part of many businessmen regarding the scope of such reforms, which have encountered multiple obstacles in Congress.

Investment plays a crucial role in generating employment, fostering innovation and increasing productivity. If resources are concentrated on debt payment and government operations, the possibility of promoting projects that contribute to long-term economic and social progress is restricted.

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