(Bloomberg) — Colombian President Gustavo Petro is close to naming Germán Ávila, the head of the country’s state-run banking group, as his next finance minister, according to a person familiar with the decision.
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Ávila will take over as Petro’s fourth finance minister after Diego Guevara stepped down just three months into the role, according to the person, who asked not to be identified since they aren’t authorized to speak about the topic.
Guevara had struggled to persuade Petro to rein in government spending ahead of next year’s election, and his exit this week triggered a plunge in the nation’s bonds and currency.
Avila has already been visiting the finance ministry and having meetings there, the person said, adding that his resume will be published on the presidency’s website in the coming days — a formal precursor to taking the job. Guevara won’t participate in the March 31 monetary policy committee meeting, the person said.
Read: COLOMBIA INSIGHT: Guevara Exit Stresses Fragile Fiscal Outlook
Ávila, a former comrade from Petro’s days in the M-19 guerrilla group, now heads Grupo Bicentenario, a conglomerate of government-owned banks, fund managers and insurance companies. Both men quit the armed struggle and embraced civilian life more than three decades ago.
Ávila will take office needing to deal with the widest fiscal deficit since the Covid-19 pandemic, a gap that was blown out by a rapid growth in public spending combined with weak tax revenue.
Colombia posted a budget deficit of 6.8% of gross domestic product last year. The government will now have to cut the 2025 budget by 12 trillion pesos ($2.9 billion) after congress blocked an attempt to raise taxes.
Read: Colombian Peso Dives on Unconfirmed Reports of Guevara Exit
Fitch Ratings lowered Colombia’s credit outlook to negative from stable earlier this month while maintaining a BB+ sovereign score. The Andean nation lost its investment grade rating in 2021.
Ávila studied economics at Bogota’s National University, one of the nation’s top institutions of higher education.
–With assistance from Nicolle Yapur.
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