Encouraging electoral results, big challenges ahead for the new government
President-elect de la Espriella's victory was expected; in our more stressed scenarios, his chief opponent Iván Cepeda lost in over 75% of all simulations. Still, the new president-elect defeated his closest rival by less than 1 percentage point: the narrowest victory in modern Colombian history. Our estimates assumed that Cepeda would capture most of the additional votes, as ultimately occurred. The expected margin in de la Espriella's favor was 2.1 pp, or 500,000 votes. We believe these estimates ended up extremely close to the actual runoff results.
The next administration will inherit a perfectly divided country. It will fall to de la Espriella to navigate this complex political and social panorama, while facing fierce opposition both from Cepeda and, likely even more from outgoing President Gustavo Petro. Meanwhile, the healthcare system is seriously underfunded, with patients already suffering the consequences; the energy sector is in crisis, and climate events will push it to its limits; and security is in its worst state in years, with armed groups present in more than 50% of municipalities. The winds of reform are howling – and the next administration will be forced to try to navigate them.
The 2026 MTFF can be deemed a fiscal fairytale. No one will pay attention to it, leaving for the next administration the difficult task of recouping the reputation of a valuable fiscal policy instrument poorly guarded by Finance Minister Germán Avila, not to mention the now seldom-mentioned fiscal rule.
Colombia is doing well in the export arena, though it isn’t in an export boom. But imports have suffered, likely due to milder economic growth. As a result, the current account deficit suffered a substantial correction that might be reversed rather quickly.
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