What Jumps Out: Countdown

The traditional Battle of Boyaca holiday marked the start of the last 12 months of Gustavo Petro’s administration. If the first 36 months were tough, they might yet be seen as the easiest. Petro, despite the chaos, has made progress on employment, labor rights, repatriation of land, and poverty, all priorities for him. He will also spend the next year presiding over healthy economic expansion. The black mark, beyond the chaotic nature of his stewardship, is the fiscal situation with a burgeoning deficit; however, that deficit didn’t suddenly appear since 2022, it has been stacking up for decades due to poor economic management – unsustainable fuel subsidies, which largely benefited the rich, would be the prime example. But what can be done?

Crucial social programs require money; however, there is no buy-in from Colombia’s elite. There is even push back on the GINI coefficient, which has been so damning of Colombia’s inequality – suddenly, perhaps it isn’t accurate or the best measurement in this country. That is bunkum. GINI has been accepted for years as a yardstick for inequality across the planet.

Petro’s reforms have been both well-intentioned and necessary, but he always bit off more than he could chew. Organizing Colombia in four presidential terms, let alone four years, would be a struggle. Ahead of the elections, getting much more done will be a struggle, especially with the imprisonment of Álvaro Uribe polarizing further congress. Yesterday’s demonstrations in favor of Uribe were as expected in size – large in right-wing Medellín and modest across the rest of the country. Even in Medellín, 10x as many turned out for the vintage car parade later in the day.

We have the July CPI data from Departamento Administrativo Nacional de Estadística – DANE Colombia, which at 4.8% won’t jump off the page – regardless, the Banco de la República – Colombia has no full meeting this month. This week we had June Exports (+2.6%), which recovered somewhat but are still sputtering as commodities struggle. No doubt, due to the economic recovery, they will be swamped by Imports and there will be another sizable deficit.

Have a great day.

Regards.

Roops.

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Leticia, Amazonas, commemoration of the 206th anniversary of the Battle of Boyaca. Photo credit: Presidencia de la República de Colombia.