An unwarranted emergency

COLOMBIA - In Brief 21 Dec 2025 by Andrés Escobar Arango

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During the press conference convened to announce the Central Bank’s Board decision to keep its policy rate unchanged at 9.25%, something quite unusual happened. Once governor Villar read the press statement agreed upon by the board members, finance minister Avila intervened not to comment the government’s take on the policy rate decision but to announce that the dire fiscal situation warranted the declaration of a state of economic emergency. The main goal of this decision, according to minister Avila, is to bring back to life the COP 16 trillion (0.8% of GDP) contemplated in the financing law recently sunk by Congress. In order to make the state of emergency a reality, a government decree must be issued with the signature of the president and all the cabinet ministers. However, finance minister Avila mentioned the government was still working on its content. Strangely enough, interior minister Benedetti was quoted by Caracol during the weekend saying the decree was signed on Thursday and that he thought it had already been released. As of Sunday December 21st, however, there is no published decree, which means the state of emergency has not been formally decreed. There is a half-baked draft version circulating, though. It contains the measures that would be taken on the tax front but still lacks the required justification of why declaring a state of emergency is warranted. The main elements included in this draft are: - An increase in the net wealth tax; it would be a marginal tax starting at 0.5% for net assets holdings over $ 550 thousand (COP 2 billion), which increases all the way to 5% for net asset holdings over $ 27.5 million (COP 105 billion) - VAT on online g...