October 17, 2019 / 12:34 PM / 2 months ago

Colombia Congress approves $78.7 billion 2020 budget

FILE PHOTO: Colombia's Finance Minister Alberto Carrasquilla Barrera speaks during the Fourth Colombian Business Congress in Medellin, Colombia August 15, 2019. REUTERS/David Estrada

BOGOTA (Reuters) - Colombia’s Congress late on Wednesday approved a 2020 government budget of 271.7 trillion pesos ($78.7 billion), hours after the top court rolled back a tax reform proposal that was meant to provide new resources for state spending.

The figure represents an increase of 10.2% compared to the current year.

“We are coming out of this ... with strengthened public finances and a clear horizon for 2020,” Finance Minister Alberto Carrasquilla said after the approval of the budget.

Colombia’s constitutional court on Wednesday overturned a tax reform law that took effect this year, potentially affecting investment and forcing the government to find new resources.

The budget allocates 170.1 trillion pesos ($49.3 billion dollars) to operating expenses, an increase of 8.7% over 2019, and 47.3 trillion pesos ($13.7 billion dollars) to investment, an increase of 16.1%.

It sets aside 53.3 trillion pesos ($15.4 billion) for debt service. The sector receiving the greatest resources will be education with 44.2 trillion pesos ($12.8 billion dollars), while 42.7 trillion pesos ($12.4 billion) will be used to pay pensions.

Colombia’s economy will expand 3.6% this year, according to the budget targets, above the 2.6% growth of 2018.

Reporting by Luis Jaime Acosta, writing by Brian Ellsworth

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