Colombia government chaos deepens as finance minister quits

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Colombian President Gustavo Petro has lost his 13th cabinet minister in three months, sending the country’s first leftist government into further chaos with just over a year until the next presidential election.

Finance minister Diego Guevara, who took office in December, said he had quit after “a calm and friendly personal conversation” with Petro on Tuesday.

However local media reports, which the finance ministry has denied, cited a bust-up over the minister’s efforts to rein in the widening budget deficit.

Petro now must name his fourth finance minister since taking office in 2022, as the peso tumbles over rumours of the president rejecting spending cuts. Guevara’s predecessor resigned in a corruption probe and none of Petro’s original cabinet remains in office.

The president, who cannot run again in 2026 because of a constitutional term limit, is desperately trying to salvage something from the rest of his time in office.

This week, he promised a referendum on two signature pieces of legislation recently blocked by congress and also called for mass marches in support of his reforms. The demonstrations on Tuesday were mostly attended by union members and public sector workers who had been given the day off.

The Petro government’s internal chaos was laid bare in a televised cabinet meeting last month, in which leftist ministers — including vice-president Francia Márquez — protested at scandal-ridden fixer Armando Benedetti being included in the government as chief of staff.

Petro accused his ministers of ideological sectarianism and days later called for mass resignations. He then promoted Benedetti to interior minister, while removing Márquez, a prominent Afro-Colombian activist, from her post at the newly created equality ministry. She remains vice-president.

As well as Márquez, 10 other ministers quit, with the foreign minister having already resigned in January.

Colombia’s congress rejected a proposed tax rise in December, leaving the government with little fiscal room after posting a deficit last year of 6.8 per cent of GDP, well above its target 5.6 per cent, and lower revenues than projected.

The peso fell 1.7 per cent against the dollar after local media reported that Guevara would resign on Tuesday and slid a further 0.6 per cent on Wednesday morning.

Colombia would suffer greater market turmoil if the rumours about Petro blocking budget cuts were confirmed, said Munir Jalil, chief economist for the Andean region at BTG Pactual.

“If this is confirmed, then the expectation is that whoever is appointed at the post will be unwilling to commit in favour of fiscal consolidation,” said Jalil. “This should be bad news for the sovereign bonds and for the currency.”

Rating agency Fitch earlier this month downgraded its credit outlook for Colombia to “negative” from “stable”, citing concerns over the “deterioration in its fiscal position and uncertain prospects for corrective measures”. Colombia lost its investment grade status in 2021.

Additional reporting by Tommy Stubbington in London