(Bloomberg) — Colombia’s government will skirt congress and take the unprecedented step of issuing its 2025 budget by decree.
The administration of President Gustavo Petro took the decision after it failed to reach an agreement with lawmakers on spending cuts and tax hikes, Lower House representative Eliecer Salazar, a government ally who is president of a congressional economic committee, said Tuesday.
The unorthodox use of presidential powers is likely to be challenged in the Constitutional Court, which could potentially throw the budget out, leaving it unchanged from 2024, said Juan Felipe Lemos, an opposition senator.
Petro will issue a budget of 523 trillion pesos ($126 billion) next year, overriding the opposition of a majority of members of congress who had demanded lower spending.
The government’s desire to increase taxes to finance a 12 trillion pesos shortfall triggered a dispute with opposition lawmakers who consider the economy too weak to withstand higher levies.
Weak economic growth has meant lower-than-expected tax revenue, which has undermined the government’s fiscal position. The finance ministry had already cut the 2024 budget by 20 trillion pesos earlier this year.
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