Gross public debt at the close of 2019 was 607.3 trillion pesos, about $164.1 billion, equivalent to 57.2% of GDP, according to figures from the comptroller’s office.
“It is possible we will suffer a setback of 10 years in the advances achieved on things like distribution of income, the increase in formal employment,” Carlos Felipe Cordoba said at an virtual event about the impact of the pandemic.
Latin America’s fourth-largest economy has been obliged to look for billions in funding by issuing bonds and obtaining credit with organizations such as the Inter-American Development Bank amid increased demand for resources during a COVID-19 lockdown.
It also has been forced to abandon plans to keep lowering its fiscal deficit. The government predicts the economy will contract 5.5% this year and the central government deficit will reach 8% of GDP.
“The challenge for fiscal policy in the medium-term is to reorient public spending to elevate productive capacity, diversify production and increase productivity and the competitiveness of the economy,” Cordoba said. “It’s a big challenge.” (Reporting by Luis Jaime Acosta; Writing by Julia Symmes Cobb; Editing by Will Dunham)