BOGOTA, July 17 (Reuters) - Colombia will reduce spending in the 2018 budget it will present to congress later this month in a bid to meet its fiscal deficit target, Finance Minister Mauricio Cardenas said on Monday.
The move comes as the market warns about the likelihood the country will not meet its fiscal targets as the weak economy trims revenue.
“We are still in the final figures of the budget, we have until the end of the month,” Cardenas told local radio Javeriana Estereo. “There’s no way to reduce the deficit if it’s not through a reduction in spending, that’s what we are going to do, a reduction in spending equivalent to half a point of GDP.”
Cardenas told daily newspaper El Tiempo that the spending cut would amount to about 5 trillion pesos ($1.65 billion) and would come mainly from operating expenses.
The government set a fiscal deficit target of 3.6 percent of GDP for this year and has raised the 2018 deficit to 3.1 percent of GDP from an original 2.7 percent of GDP.
“The minister is trying to calm foreign investors, we’ll see if it’s enough,” Daniel Escobar, manager of economic studies at brokerage Global Securities, told the radio station.
Cardenas will meet foreign investors in New York on Tuesday to discuss the fiscal numbers. (Reporting by Nelson Bocanegra; Writing by Helen Murphy; Editing by Nick Zieminski)