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This portfolio review includes Colombian banks with Issuer Default Ratings (IDR) rated at the same level or above that of the sovereign.

The government plans to gradually reduce the central government fiscal deficit by 3.4pp of GDP.

Breaking the fiscal rule without extraordinary cause may risk overspending, mounting debt, and a blow to Colombia’s economic credibility.

The proposal allocates 209.1 trillion pesos for government operating costs, 2.6% more than this year, while proposed debt payments would rise 1.6% to 71.6 trillion pesos.

According to Fitch Ratings, Latin America sovereigns' weak public finances make them particularly vulnerable to the coronavirus crisis by limiting both their counter-cyclical policy flexibility and their ability to support post-crisis economic recoveries. The pronounced negative...

The spending crunch will test the next president of Colombia's "commitment to meet the current fiscal rule's targets."

"We will continue to reduce spending with the objective of hitting fiscal targets and reinforcing our country’s BBB rating,” said Mauricio Cárdenas.

“Colombia's creditworthiness could be pressured” if low growth persists and high fiscal deficits undermine the government’s push to reduce debt.