Colombian Finance Minister Diego Guevara has stepped down following disagreements over budget cuts with President Gustavo Petro, adding to concerns about the country’s fragile public finances.
Guevara, who had served just over three months in the role, announced his resignation on Tuesday via a post on X, stating that he had a “calm and friendly” conversation with Petro but did not disclose his reasons for leaving. However, a source from the presidential palace confirmed that the minister resigned on Monday night after clashing with Petro over budget reductions.
His departure comes hours after lawmakers rejected a labor reform proposed by Petro, Colombia’s first leftist president. Guevara’s exit marks 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, head of Grupo Bicentenario, a government-owned financial holding company. However, analysts at Banco de Bogotá have raised concerns over Ávila’s experience, warning that continued cabinet reshuffles could increase 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,” Banco de Bogotá stated in a note. The finance ministry’s leadership change could also impact expectations for a cut in the central bank’s benchmark interest rate, the note added.
The Colombian peso weakened slightly over 1% on Tuesday, closing at 4,118 against the U.S. dollar before news of Guevara’s resignation broke.
Earlier this month, Guevara indicated that the government was considering further delays to budget spending as it grapples with fiscal challenges that have already led to significant expenditure cuts.
