Colombian Finance Minister Diego Guevara resigned after budget disputes with President Gustavo Petro, highlighting concerns over the country’s public finances. Guevara’s departure follows legislative rejections of labor reforms and reflects instability as President Petro reshuffles his cabinet. German Avila is set to replace him, raising questions about experience in managing economic issues amidst a depreciating peso.
Diego Guevara, Colombia’s Finance Minister, resigned on Tuesday following tense discussions regarding budget cuts, shortly after lawmakers dismissed a labor reform proposed by President Gustavo Petro. Guevara’s departure, occurring just over three months into his term, highlights the ongoing turmoil related to Colombia’s public finances. In his post on X, Guevara described a “calm and friendly” conversation with President Petro, without disclosing specific reasons for his resignation.
A source from the presidential palace indicated a disagreement between Guevara and Petro over budgetary issues, leading to the resignation on Monday night. President Petro, the first leftist leader in Colombia, has recently undergone a significant cabinet reshuffle, replacing 12 out of 19 ministers. According to reports, German Avila, the head of Grupo Bicentenario, will succeed Guevara, yet concerns exist regarding his experience in managing public finances.
Banco de Bogota expressed that “the constant changes in the cabinet and the profile of the incoming minister will increase political and economic instability.” They also noted that this leadership change could exacerbate uncertainties surrounding a potential decrease in the central bank’s key interest rate. The Colombian peso experienced a slight depreciation of over 1% on Tuesday, weakening to 4,118 against the U.S. dollar. Guevara had previously indicated consideration of further delays in budget spending due to existing fiscal challenges that necessitated spending cuts.
In summary, Diego Guevara’s resignation as Colombia’s Finance Minister marks a significant moment in the country’s political landscape, reflecting ongoing disagreements regarding budgetary measures and resulting in increasing uncertainties about its fiscal health. With the appointment of German Avila and the potential for further economic instability, the situation merits close attention as Colombia navigates its financial challenges.
Original Source: theprint.in
