Colombian finance minister resigns after clash with President over budget

• Published On: 20 March 2025 at 07:20

Colombian Finance Minister Diego Guevara resigned after disagreements with President Gustavo Petro over budget cuts, raising concerns about the country's fragile public finances.

Guevara, who had been in the role for just over three months, announced his resignation on Tuesday in a post on X, stating that he had a "calm and friendly" conversation with Petro but did not reveal his reasons for leaving. However, a source at the presidential palace confirmed that the minister resigned on Monday night after a disagreement with Petro over budget cuts.

His departure comes just hours after lawmakers rejected a labour reform proposed by Petro, Colombia's first leftist president. Guevara's departure is yet another shake-up in Petro's administration, which has seen 12 out of 19 ministers replaced in recent months.

According to local reports, Guevara is expected to be succeeded by Germán Ávila, the head of Grupo Bicentenario, a government-owned financial holding company. Analysts at Banco de Bogotá have expressed concerns about Ávila's experience, warning that further cabinet reshuffles may worsen political and economic instability.

"The constant changes in the cabinet and the profile of the incoming minister will heighten uncertainty in the political and economic landscape," the Bogota-based bank said in a note. The change in leadership at the finance ministry may also have an impact on expectations for a reduction in the central bank's benchmark interest rate, according to the note.

The Colombian peso fell slightly more than 1% on Tuesday, closing at 4,118 against the US dollar before news of Guevara's resignation broke.

Earlier this month, Guevara stated that the government was considering further delays in budget spending as it dealt with fiscal challenges that had already resulted in significant expenditure cuts.