Colombian Finance Minister Diego Guevara resigned amidst budget disputes with President Gustavo Petro, just after labor reforms were rejected. His brief tenure raises uncertainty about the country’s public finances. Guevara will be replaced by German Avila, though concerns exist regarding his management experience in public finance. The Colombian peso weakened following the announcement, indicating market apprehension.
Diego Guevara, Colombia’s Finance Minister, resigned following budget disputes with President Gustavo Petro, shortly after lawmakers rejected a proposed labor reform. This resignation, after just over three months in the position, highlights the uncertainty surrounding Colombia’s public finances. Guevara communicated through a post on X that he had a cordial discussion with President Petro, yet did not disclose the reasons for his departure.
According to a source from the presidential palace, Guevara’s resignation was prompted by differing opinions on budget cuts. President Petro, the first leftist leader of Colombia, has recently made significant changes, replacing 12 out of 19 ministers in his cabinet. Reports indicate that Guevara will be succeeded by German Avila, currently head of Grupo Bicentenario, a government-linked holding company.
While Avila takes on this new role, analysts at Banco de Bogota expressed concerns regarding his experience in managing public finances. They noted that ongoing changes within the cabinet may foster political and economic instability, which could further complicate anticipated adjustments to the central bank’s interest rate. On the day of Guevara’s resignation, the Colombian peso depreciated over 1%, weakening to 4,118 against the U.S. dollar.
Amid persistent fiscal challenges, Guevara previously announced the government’s consideration of delaying budget spending, highlighting the ongoing pressure for cuts due to fiscal difficulties.
The resignation of Finance Minister Diego Guevara reflects ongoing tensions within Colombia’s government regarding budgetary measures and fiscal stability. His departure underscores the challenges faced by President Gustavo Petro’s administration, particularly in light of significant cabinet changes. The appointment of German Avila raises concerns over experience amid fears of increased political and economic uncertainty, ultimately impacting financial strategies and currencies.
Original Source: theprint.in
