Colombia: De la Espriella Increases Petro’s 2027 Budget by 10%
The government of President Abelardo De la Espriella presented a new General Budget of the Nation bill for 2027 to Congress totaling 634.9 trillion pesos (approximately US$205 billion), a figure 59.3 trillion pesos (approximately US$19 billion) higher than the proposal left by the previous government of Gustavo Petro.
The increase, of around 10%, puts the new administration before its first political contradiction: after coming to power promising to reduce public spending and shrink the size of the state, its first budget far exceeds the one presented by the administration it replaced.
The government defends the increase as an exercise in “coming clean” about the country’s public finances. According to Finance Minister Miguel Gómez, the previous proposal did not sufficiently account for several state obligations and could not have anticipated the economic impact of the earthquake that struck the country on August 10.
The new proposal incorporates those pressures, but it also significantly increases borrowing and reduces the money allocated to public investment.
Colombia: De la Espriella Increases Petro’s 2027 Budget by 10%
Petro’s proposal allocated 575.6 trillion pesos (approximately US$185 billion) for 2027. After Congress’ economic committees returned the bill over concerns about its fiscal sustainability, the new government revised the figures and substantially increased the amount.
The official explanation is that the first version included revenues that were not fully guaranteed and left some foreseeable obligations uncovered. The government says it had to allocate additional resources for healthcare, pensions, universities, energy and gas subsidies, fuel, and social security-related expenses. It also included the needs arising from the emergency caused by the earthquake and the reconstruction of affected areas.
The increase, however, does not translate into a greater investment effort. Debt service will rise from 100.4 trillion pesos (approximately US$32 billion) in 2026 to 155.4 trillion pesos (approximately US$50 billion) in 2027, an increase of 54.7%. Operating expenses will also rise, reaching 392.6 trillion pesos (approximately US$126 billion), while investment will fall from 89.5 trillion pesos (approximately US$28.9 billion) to 87 trillion pesos (approximately US$28 billion).
In other words, a significant portion of the budget increase will not be available for new projects or programs. The government will have to devote more resources to meeting obligations already incurred and, above all, to paying down debt.
En el marco de la radicación del PGN 2027, el ministro @miguel_gomez_m presentó la primera fase del Plan Rescate de la Economía: ordenar las finanzas públicas, garantizar recursos para las obligaciones esenciales y recuperar condiciones para el crecimiento.#PresupuestoDeLaVerdad pic.twitter.com/Rm3dn9ZBse
— MinHacienda (@MinHacienda) August 27, 2026
More debt and less investment
The new budget structure reveals the main problem facing De la Espriella. Of the total budgeted amount, 281.3 trillion pesos (approximately US$90.7 billion) correspond to capital resources, a substantial portion of which will come from new borrowing. Planned domestic and external loans total 238.6 trillion pesos (approximately US$77 billion), equivalent to 37.6% of the total budget.
The government argues that it inherited a more deteriorated fiscal situation than the previous administration’s figures showed. The Finance Ministry also maintains that higher interest rates and the cost of accumulated obligations have reduced the room for maneuver in 2027.
The earthquake was another factor that added pressure to public finances, the government acknowledges. The administration estimates that responding to the emergency and rebuilding will require between 30 trillion and 40 trillion pesos (approximately US$12 billion), although some private estimates put the total cost above that figure.
The new budget incorporates part of those needs and includes mechanisms such as the “Miracle Reconstruction Fund“
Opposition questions austerity promise
The opposition has found in the budget an argument to challenge one of De la Espriella’s main economic promises: reducing public spending.
The contrast is particularly evident because during the campaign, the now-president and his economic team advocated a strong austerity program. Miguel Gómez, before taking office as finance minister, had proposed the need for an adjustment of around 40 trillion pesos (approximately US$13 billion) to contain the fiscal deterioration. Now, the new government’s first budget proposal not only does not decrease the amount presented by Petro, but increases it by 10%.
From the Historical Pact — the main opposition party — lawmakers such as David Racero have particularly questioned the increase in borrowing. The criticism is that De la Espriella’s proposal includes nearly 100 trillion pesos (approximately US$32 billion) more in capital resources than Petro’s proposal, while projected tax revenues are lower.
“Where will those who raised the alarm saying that the Petro government was a big spender and indebted the country be now?” the opposition senator asks on his X account. Racero also stresses that “the Abelardo government projects a 10 trillion-peso reduction in the state’s current tax revenues” and asks, “How does that add up?” With debt. The same debt they swore we would never see again,” he concludes.
¿Dónde estarán quienes pegaron el grito en el cielo diciendo que el gobierno Petro era un derrochón y que endeudó al país?
Hoy Abelardo presentó su presupuesto para el 2027 por un total de $634,952 billones, en contraste con el de Petro que sumaba $575,7 billones. ¿Cómo?
Pues… pic.twitter.com/9lqgFNZip4
— David Racero (@DavidRacero) August 27, 2026
A parallel 40 trillion-peso cut
De la Espriella’s response is that the budget increase does not mean he has abandoned his austerity promise. The government announced a fiscal adjustment program that includes cuts of around 40 trillion pesos (approximately US$13 billion), with an initial immediate reduction of nearly 21 trillion pesos (approximately US$6.7 billion).
The intention is for the cuts to focus on spending considered discretionary or administrative, including contracts and bureaucratic structures, while protecting the state’s essential obligations. The executive branch is also preparing a so-called Economic Rescue Law to contain the growth of spending and debt.
The government is thus proposing two simultaneous moves: a nominally larger budget to account for obligations that, according to the Finance Ministry, had been underestimated, followed by an adjustment to reduce actual spending. The major question will be whether those cuts can offset the increase in obligations and prevent most of the fiscal effort from ultimately being concentrated in new debt.
Congress will now have the final say. The economic committees must review the bill and determine the amount by September 15, while the full budget must be approved by October 20. The debate will also be the first major test of the austerity promise with which De la Espriella came to the presidency.