Bloomberg News

Colombia Government Budget Deficit Was 2.9% of GDP in 2011

February 01, 2012

(Adds Echeverry’s comments starting in second paragraph.)

Feb. 1 (Bloomberg) -- Colombia’s central government budget deficit was 2.9 percent of gross domestic product last year, less than the government’s December forecast of 3.2 percent, as strong economic growth boosts tax revenue.

The Andean nation’s consolidated budget deficit, which includes states, municipalities and state-run companies, was 2.2 percent of GDP, compared with the government’s prior estimate of 2.9 percent, Finance Minister Juan Carlos Echeverry told reporters in Bogota.

Quickening economic growth and rising foreign direct investment are bolstering tax revenue and reducing the government’s financing needs. Tax revenue surged 25 percent in 2011 to 83.7 trillion pesos ($46.5 billion) from a year ago, Echeverry said.

This year the government targets a central government budget deficit of 2.8 percent of GDP and a consolidated budget deficit of 1.8 percent, he said.

Colombia suspended auctions of short-term notes, known as TCOs, in the first half of the year as increased cash holdings reduced the need for liquidity, Echeverry said. The government in June will decide if it carries out the auctions in the second half of the year, Echeverry said.

The yield on the nation’s 10 percent bonds due in July 2024 fell two basis points, or 0.02 percentage point, to 7.33 percent, according to the central bank. The price rose 0.198 centavo to 121.2630 centavos per peso.

--Editor: Robert Jameson

To contact the reporters on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net; Blake Schmidt in Bogota at bschmidt16@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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