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Colombia Braces for Inflation Data Amidst Heightened Political Tensions

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María Alejandra Trujillo
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Colombia Braces for Inflation Data Amidst Heightened Political Tensions

As the year draws to a close, the political and economic climate in Colombia is heating up. The National Administrative Department of Statistics (DANE) is on the brink of releasing November's inflation data, a key determinant in the ongoing minimum wage discussions and a crucial influence on the Central Bank's interest rate decisions. The Consumer Price Index (CPI) is forecasted to stay in single digits by year-end, with estimates hovering around 9.6% for December and 10.17% for November.

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Political Tensions and Reforms

Meanwhile, the government of Colombia faces opposition from within. Opposition parties are pushing to oust Minister of Health, Guillermo Alfonso Jaramillo, through a vote of no confidence, citing his ineffective management of the health sector that has resulted in financial and supply crises. In the midst of this, Hernan Penagos steps into his role as the national registrar, inheriting a substantial budget and the responsibility of overseeing thousands of positions until 2027.

Simultaneously, Colombia's Lower House has passed the government’s health-care reform. This reform, championed by President Gustavo Petro, seeks to curtail the role of the private sector. The bill now awaits two debates in the Senate before it can be enacted in the first half of 2024. Petro's reform aims to eliminate insurers as intermediaries, intending for the government to directly pay care providers and medical professionals.

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Tax Reforms and Corporate Responsibility

Colombian companies brace themselves for the introduction of a new tax, the Minimum Income Tax (TTD). The TTD, which demands 15% of profits irrespective of the company's scale, was included in the tax reform approved by the Colombian congress at the end of 2022. This tax was largely introduced to meet the requirements of the Organisation for Economic Cooperation and Development (OECD).

Regional Developments

On a broader scale, it marks a year since former Peruvian President Pedro Castillo's unsuccessful self-coup attempt. Castillo has recently requested release from prison and reinstatement. Meanwhile, in Guatemala, indigenous communities and civil organizations are marching to uphold democracy and support incoming president, Bernardo Araval de Leon, against attempts to obstruct his inauguration.

Back in Colombia, Margareth Chacon faces possible conviction for alleged involvement in the murder of Paraguayan prosecutor Marcelo Pecci. Additionally, the Minister of Justice is due to apologize for the 1982 disappearance of farmer Zoilo de Jesus Rojas. Colombia's Army Reserve also plans to protest against the Special Jurisdiction for Peace (JEP) accepting former paramilitary chief Salvatore Mancuso. As tensions rise, Colombians find solace in the Day of the Little Candles, celebrated with various free events, including a music festival and the inauguration of Christmas lights in Bogota.

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