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Colombian President Gustavo Petro has lost his thirteenth cabinet minister in three months, sending the country’s first leftist government into further chaos with just over a yr until the subsequent presidential election.
Finance minister Diego Guevara, who took office in December, said he had quit after “a peaceful and friendly personal conversation” with Petro on Tuesday.
Nevertheless local media reports, which the finance ministry has denied, cited a bust-up over the minister’s efforts to rein within the widening budget deficit.
Petro now must name his fourth finance minister since taking office in 2022, because 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 stays in office.
The president, who cannot run again in 2026 due to a constitutional term limit, is desperately attempting to salvage something from the remaining of his time in office.
This week, he promised a referendum on two signature pieces of laws recently blocked by congress and in addition called for mass marches in support of his reforms. The demonstrations on Tuesday were mostly attended by union members and public sector staff who had been given the time off.
The Petro government’s internal chaos was laid bare in a televised cabinet meeting last month, by which leftist ministers — including vice-president Francia Márquez — protested at scandal-ridden fixer Armando Benedetti being included in the federal 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 outstanding Afro-Colombian activist, from her post on the newly created equality ministry. She stays vice-president.
In addition to 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 federal government with little fiscal room after posting a deficit last yr of 6.8 per cent of GDP, well above its goal 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 an extra 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 that is confirmed, then the expectation is that whoever is appointed on the post can be unwilling to commit in favour of fiscal consolidation,” said Jalil. “This needs to 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 unsure prospects for corrective measures”. Colombia lost its investment grade status in 2021.
Additional reporting by Tommy Stubbington in London
