Colombia may seek between $8 billion and $20 billion from the International Monetary Fund as it grapples with a fiscal crisis, but economists and former officials say it could struggle to meet the conditions of any deal. A finance ministry team travelled to Washington this week for talks at President Abelardo de la Espriella’s direction.
Ten economists and current and former officials consulted by Reuters said the IMF’s Precautionary and Liquidity Line could be the best fit for Colombia. The facility is intended for countries with broadly sound economic fundamentals that nevertheless face vulnerabilities. To qualify, Colombia would need to show progress on the sustainability of its public debt.
The government projects a fiscal deficit of 7.2% of gross domestic product this year and a record 9.4% next year. In a 2025 review, the IMF said Colombia needed to reduce its budget by at least 3.2% of GDP over three years. Repeated spending overruns have weakened confidence in the country’s policy framework, the report said.
Former Finance Minister Mauricio Cardenas said the government should seek a $20 billion loan with an average maturity of four years. He told Reuters that the financing could help replace more expensive debt. Other interviewees said an IMF agreement could strengthen market confidence and help unlock funding from the World Bank and the Inter-American Development Bank.
Analysts identified failure to meet possible fund conditions as the main risk. They pointed to a proposed spending-cut bill worth about 2.2% of GDP, which the government plans to introduce in Congress in mid-October. The legislature is deeply divided and the government’s political position is fragile.
Colombia previously drew $5.4 billion from an IMF credit line during the COVID-19 pandemic. It repaid the loan in full last year.