Colombia declared on Friday that it would approach the International Monetary Fund to renegotiate loan repayment terms for the remaining $6 billion that it was given during the Covid-19 outbreak, a debt that is already “asphyxiating” the nation’s finances.
President Gustavo Petro has instructed Finance Minister Ricardo Bonilla to meet with IMF Chief Kristalina Georgieva “to look at alternatives” for repayment. A formal request will be presented at the IMF meeting in Washington the following week.
Sixty-five million of the initial loan had already been paid back by Bogota, the finance minister informed AFP.
Payments scheduled for 2024 and 2025 would “reduce the possibilities for investment,” Bonilla said at a public event in Cartagena.
“The debate is this: do we pay the debt or do we invest? Or how do we balance the two? It is the most important macroeconomic discussion we have for 2024,” said Bonilla.
Petro, Colombia’s first-ever leftist president and an economist by training, on Thursday accused his conservative predecessor Ivan Duque of being the “father of debt in Colombia” due to the loan taken in 2020 to deal with the economic fallout of the pandemic.
“We will discuss how we can improve the debt profile of Colombia because it is asphyxiating us, hanging us,” Petro added.
According to the finance ministry, Colombia’s overall debt at the end of 2023 was close to $224 billion, or almost 52% of GDP.
