{"id":24734,"date":"2023-07-23T12:24:53","date_gmt":"2023-07-23T17:24:53","guid":{"rendered":"https:\/\/mascolombia.com\/colombias-foreign-debt-continues-to-grow-every-day-the-country-is-more-and-more-indebted\/"},"modified":"2023-07-23T12:24:54","modified_gmt":"2023-07-23T17:24:54","slug":"colombias-foreign-debt-continues-to-grow-every-day-the-country-is-more-and-more-indebted","status":"publish","type":"post","link":"https:\/\/mascolombia.com\/en\/colombias-foreign-debt-continues-to-grow-every-day-the-country-is-more-and-more-indebted\/","title":{"rendered":"Colombia\u2019s foreign debt continues to grow: every day the country is more and more indebted"},"content":{"rendered":"\n

Colombia\u2019s foreign debt continues to make headlines. According to a recent report by Banco de la Rep\u00fablica<\/a>, its amount is enormous and its weight in economic activity deserves further analysis.<\/p>\n\n

Colombia\u2019s external debt has experienced dizzying growth and, even more worryingly, is increasing faster than the country\u2019s economy. While the Gross Domestic Product (GDP) decreased 0.8% between April 2022 and April 2023, the external debt increased 7.5% in the same period.<\/strong><\/p>\n\n

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You may be interested in: Guaranteed Minimum Income Subsidy in Bogota: check here if you are one of the 273,233 beneficiary households and how to collect it<\/strong><\/a><\/p>\n<\/blockquote>\n\n

The weight of debt in the economy<\/h2><\/h2>\n\n

Although within world averages and in relation to Gross Domestic Product, the amount of external debt is not very large when compared to the debt of countries such as Spain – in Spain it is 113.20% of GDP and in the United Kingdom it is 102.6% -, its evolution is worrisome.<\/p>\n\n

In April 2023, Colombia\u2019s external debt stood at USD $187,318 million, an increase of 7.50% compared to USD $174,248 million in the same month of 2022, according to the portal Datos Macro and Banco de la Rep\u00fablica.<\/p>\n\n

External debt in April 2023<\/strong> represented 55.3% of the country\u2019s Gross Domestic Product (GDP)<\/strong>, after 53.3%<\/strong> in the same month of 2022<\/strong>. If it continues at this rate, Colombia could be facing a critical situation in the coming years.<\/p>\n\n

On the other hand, in April 2023, public debt registered an amount of USD $106,387 million, which represents an increase of 5.77% compared to USD $100,581 million in the same month of the previous year.<\/p>\n\n

On the other hand, private debt reached USD $80,931 million in April, an increase of 9.86% compared to the USD $73,667 million recorded in the same month of 2022.<\/p>\n\n

The above signifies a trend of a higher increase in private debt compared to public debt. It also reflects a global trend of debt growth due to the sustained increase in interest rates, the increase in inflation and the decrease in growth rates, according to a World Bank analysis.<\/p>\n\n

From now on, there is talk of a global debt crisis, especially in emerging and developing countries, of which Colombia is part.<\/p>\n\n

Alarm bells are ringing: Colombia\u2019s foreign debt keeps growing<\/h2><\/h2>\n\n

Colombia\u2019s foreign debt and trade deficit are the only variables in the economy that are permanently growing. By mid-2012, the external debt was USD $76,534 million. A year later it reached USD $85,140 million, according to data from Banco de la Rep\u00fablica.<\/p>\n\n

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Read also: The great opportunity of agricultural waste: keys to purify air and water in an environmentally friendly way through activated carbon<\/strong><\/a><\/p>\n<\/blockquote>\n\n

In April 2015<\/strong>, external debt reached USD $106,305 million, which represented 32.9% of GDP<\/strong>. In April 2016, Colombia\u2019s external debt reached 42.4% of GDP<\/strong>. In dollars, the amount was USD $114,699 million.<\/p>\n\n

Today, foreign debt represents more than half of the country\u2019s Gross Domestic Product and debt service takes up 19% of the General Budget of the Nation. Calculated investment expenditures, according to the national budget, only occupy 16% of it, which reduces the State\u2019s capacity to influence social and productive development.<\/p>\n\n

The relief offered by international entities, such as the IMF or the World Bank, is limited to very poor countries and does not reach middle-income countries. This is compounded by the current crisis faced by several major international banks, which further aggravates the situation.<\/p>\n\n

Restrictions and conditionalities<\/h2><\/h2>\n\n

In addition to the net amount of debt, the budgetary restrictions and conditionalities that the entities apply to the acquisition of new loans are of concern.<\/strong><\/p>\n\n

These conditionalities include increases in utility rates, budgetary restrictions to achieve fiscal balances at the expense of social or productive spending, and significantly limit the increase in public spending to stimulate the economy.<\/p>\n\n

Among the requirements is strict compliance with the fiscal rule, which limits the capacity for state action and appears to be a measure of self-discipline, but in reality follows the guidelines of multinational organizations such as the International Monetary Fund (IMF) and the risk rating agencies, which influence the granting of new loans by international banks.<\/p>\n\n

The IMF\u2019s insistence that Colombia be governed by the fiscal rule and have macroeconomic management contingent on guaranteeing debt repayment considerably limits the government\u2019s margin for action.<\/p>\n\n

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Continue reading: The alarming figures of migration in Colombia: strata 1, 2 and 3 migrate for lack of opportunities and strata 4, 5 and 6 for fear of the political situation<\/strong><\/a><\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The increase in Colombia\u2019s foreign debt could seriously jeopardize the country\u2019s economic future. Its growth is faster than the growth of the national economy. We explain.<\/p>\n","protected":false},"author":1,"featured_media":24622,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"rank_math_focus_keyword":"Colombia\u2019s foreign debt","rank_math_title":"","rank_math_description":"","rank_math_primary_category":"707","footnotes":""},"categories":[751],"tags":[776],"mc_distribution":[688],"class_list":["post-24734","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombian-exports","tag-article","mc_distribution-ninguna"],"acf":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/posts\/24734","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/comments?post=24734"}],"version-history":[{"count":0,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/posts\/24734\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/media\/24622"}],"wp:attachment":[{"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/media?parent=24734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/categories?post=24734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/tags?post=24734"},{"taxonomy":"mc_distribution","embeddable":true,"href":"https:\/\/mascolombia.com\/en\/wp-json\/wp\/v2\/mc_distribution?post=24734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}