What Jumps Out: Pass the Lipstick

There is no dressing up the current Colombian situation, there is no amount of makeup that can cover the cuts and bruises covering the country. A general strike has been called by the Central Workers Union for 29-30 May, conveniently just before a long weekend. This has the dual purpose of supporting the Labor Reform Referendum and protesting the nonsense behavior of the senate.

In parallel, we have the text of the revived labor reform being prepared for submission to the 4th commission of the senate. These texts could have been ready Friday, May 23, but two members of what is a hostile panel, having pressing family matters, and it was delayed it until May 26. If that doesn’t sum up the wanton disrespect for the office they have been elected to, nothing does. Will we ever see the new proposals debated? Gustavo Petro seems doubtful, so the mess will continue. ANDI – Asociación Nacional de Empresarios de Colombia is backing it, which may offer some hope.

The fiscal situation also requires a lot of makeup. March saw the YTD deficit at 2%/GDP – a year ago it stood at 1% and ended 2024 at 6.7%. Aside from government revenues falling short of its spending plans, we have continuing monthly trade deficits. Departamento Administrativo Nacional de Estadística – DANE Colombia reported improved export data last week, driven by agriculture; however, imports also rose 16.5% to $5.5 billion USD. That led to a deficit of $897 million USD, down on recent months but up 38% YoY. The rapid ascent in domestic demand for consumer goods means this situation is likely to continue.

Whilst tax revenues are rising post reforms, they are still below target levels and the DIAN (IRS) announced this week they are working with 19,000 who are struggling to pay their taxes. Clearly a country where too many companies aren’t accustomed to paying their full share – and this is in an expanding economy.

Ecopetrol have had a busy week. They have purchased 10 green energy projects amounting to 1.3gw which surpasses it 900mw target for this area of its portfolio.

Finally, a word on the markets. The Peso continues to steadily strengthen ($4169) whilst the stock market continues to hand tough and is up 26.4% YTD in dollar terms. The joke remains on the local brokers who have spent the Petro years scaring their high net worth individuals into paying high fees for low returning US markets.

Have a great day.

Roops.

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Colombia Central Workers Union. Photo credit: CUT Colombia/Facebook.