BOGOTA, Oct 20 (Reuters) – Both houses of Colombia’s congress gave final approval to a 314 trillion peso ($81.7 billion) budget for next year, as the Andean country looks to invigorate an economy pummeled by a coronavirus lockdown.
The budget, the largest in Colombia’s history, is 8.3% higher than this year’s. It was approved late on Monday by a vote of 66 to 11 in the Senate and 134 to 15 in the lower house.
“This is the budget of the recovery and we are going to see a much better Colombia next year thanks to the budgetary efforts that have been made here,” Finance Minister Alberto Carrasquilla said after the votes.
Some 185 trillion pesos are earmarked for government operating costs, nearly 11% more than this year, while investment will rise 35.7% to 58.6 trillion pesos in 2021.
Just under 70.5 trillion pesos will go toward debt payments, a leap of 31.5% from this year’s spending.
The education sector will receive just below 47 trillion pesos and pension payments will be 42.4 trillion pesos.
The budget is predicated on an economic growth target of 6.6% for 2021, compared with a forecast contraction of 5.5% in 2020 after more than five months of coronavirus quarantine closed businesses and sent unemployment soaring.
Latin America’s fourth-largest economy has been forced to abandon plans to keep lowering its fiscal deficit, as it had in recent years, amid increased demand for resources during the quarantine.
Colombia’s debt could reach the equivalent of more than 60% of its gross domestic product, Carrasquilla has said, as it drastically ups it debt load this year and next.
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