Colombia secured a $9 billion CAF credit line amid deepening fiscal deficit

The Development Bank of Latin America (CAF), led by former trade minister Sergio Díaz‑Granados, announced a US$9 billion credit facility for the incoming Colombian government, describing it as a "floor" rather than a ceiling. The line will be available until 2030 and is the largest commitment CAF has ever made to Colombia.

Fiscal analysts highlight that Colombia faces a severe fiscal gap: the primary deficit widened to -1.97% of GDP and the 2026 budget lacks over 300 trillion pesos. Bloomberg projects a fiscal deficit near 6.7% of GDP in 2026, potentially rising to 7.5% in 2027, making it the third‑largest deficit globally after Brazil and Poland. Markets reacted positively, with the peso strengthening, bond yields falling and risk spreads narrowing after the election of Abelardo De la Espriella on 21 June, but analysts warn the optimism is fragile and dependent on future reforms.