With an amount of 546.9 billion pesos the General Budget of the Nation (PGN) for 2026 was approved this Thursday, as agreed during the votes in Joint Economic Commissions between the National Government and the Congress of the Republic.

This alternative proposal emerged from the committees, reducing the amount by 10 billion compared to the Executive's initial plan. The cut reflected a response from the Legislature to moderate the size of the budget and adapt it to the fiscal control demanded by many benches. (More: The 2026 National Budget passed Congress and will be $546.9 billion.) This adjustment was not free, as it involved cuts, reallocations, and a redefinition of what could be financed, given that the government's expected revenue support remains conditional on a tax reform whose estimated amount was around 16 trillion pesos.

It's worth noting that the approved text maintains the structure originally proposed by the Ministry of Finance, with public spending growth estimated at 5.3% compared to 2025.

From 557 trillion to 546.9 trillion

An analysis carried out by the Fiscal Observatory of the Pontificia Universidad Javeriana shed light on how the original Budget formulated by the National Government did not differ from the one recently approved on October 16.

(Also: October fiscal balance: Carf warns of more spending and less cash).

In this, they found that, compared to the current 2025 budget, the 2026 PGN grows 1.9% in real terms, driven mainly by the increase in operating expenses (6.6%), a decrease in debt service (14.7%) and an increase in investment (6.4%).

However, they mention that"although the reduction in the total amount and the partial elimination of contingent revenues are steps towards greater prudence, the approved budget maintains significant risks of fiscal sustainability".

The observatory also found that Colombia's historical tax collection averages 14% of GDP, but the Budget's revenue assumptions are based on estimates of 15.6% without a financing law and 17% with it.

"Achieving these collection levels would require an unprecedented increase in the State's revenue capacity," the experts explain.

'Uncertain' expenses and income

The Fiscal Observatory of the Javeriana University also mentioned that the projected spending also delays the convergence towards the Fiscal Rule, scheduled for 2028, in the context of the activation of the escape clause.

As it explains, the rebound in the execution of the 2025 PGN and the payment of the budget lag inherited from 2024 put pressure on the fiscal balance and could widen the deficit towards the end of this year.

(We recommend: The Colombian economy would begin to show signs of cooling ).

Likewise, they mention that the Government has not yet detailed where the $10 billion eliminated as contingent income will be cut, pointing out that although it announced that it will not insist on modifying the territorial taxes on tobacco and alcohol consumption, making it clear that they are not national income," it still has not specify which other taxes they will no longer insist on.

Finally, he noted that the new Budget approved for next year"does not reflect an effort to contain spending, it continues to depend on uncertain income and temporary measures", mentioning that in a scenario of fiscal deterioration and high inflexibility of public spending, the sustainability of national finances will depend on the capacity of the next Government to build a structural and credible tax reform, which strengthens permanent income without transferring the burden to indebtedness or to territorial entities.

What did the Government initially propose?

The Executive's initial proposal called for a budget of 557 trillion pesos, with public spending growth of nearly 5.3% compared to the 2025 PGN. With that amount, the Government projected that state resources should increase through an ambitious tax reform, which sought to raise nearly 26.3 trillion pesos, to balance accounts and finance the various social, investment, and state operation programs. (You may be interested in: 'The country needs great economic debates, to think of different solutions'). In that proposal, the budget was structured into three large items: - Operating expenses: intended to cover payroll, subsidies, and the operation of the state apparatus. - Public debt service: which contemplates the payment of financial obligations.
- Public investment:
with resources earmarked for infrastructure, public works, regional development, and social improvements.Furthermore, the proposal allocated substantial amounts to sensitive sectors such as health and education. The idea was to align these commitments with the goals of the
National Development Plan
, maintain social programs, strengthen state capacity, and sustain macroeconomic stability.The Executive also contemplated adjusting the project in accordance with the legislative debate, but without leaving that core:
the 26.3 billion in revenue would be the pivot to support said budget
. However, this initial proposal encountered resistance in Congress precisely because of its high tax component, its magnitude, and its dependence on a reform that has not yet been approved to sustain it.