Colombian Finance Minister Diego Guevara resigned on Tuesday, just hours after lawmakers rejected a key labor reform proposed by President Gustavo Petro. His departure, following only three months in office, highlights growing concerns over the country’s struggling public finances. Guevara announced his resignation on social media, stating he had a “calm and friendly” conversation with Petro but did not specify the reasons behind his decision. However, a source from the presidential palace revealed that budget cut disagreements led to his resignation on Monday night.
President Petro, who has already replaced 12 of his 19 ministers, is expected to appoint German Avila, the head of Grupo Bicentenario, as Guevara’s successor. Analysts have expressed concerns about Avila’s experience in handling Colombia’s economic challenges, with Banco de Bogotá warning that the frequent cabinet changes could heighten political and economic instability. The finance ministry’s leadership change is also raising doubts over a potential cut in the central bank’s benchmark interest rate.
Financial markets reacted negatively to the uncertainty, with the Colombian peso weakening by over 1% on Tuesday, closing at 4,118 against the U.S. dollar. Guevara had recently indicated that the government was considering further delays in budget spending due to fiscal difficulties, which have already necessitated spending reductions. His resignation adds to the challenges facing Petro’s administration as it struggles to manage economic turbulence and push forward key reforms.
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