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Colombia to ‘radically diversify’ exports, says new finance minister

By Nelson Bocanegra

CARTAGENA (Reuters) – Colombia will prioritize the diversification of its exports to cut back its dependence on oil, fuel and mining and fight its excessive commerce deficit, its new Finance Minister Jose Antonio Ocampo mentioned on Thursday.

The administration of leftist President Gustavo Petro, who took workplace on Sunday, has already proposed a tax reform set to boost 25 trillion pesos, some $5.8 billion, for social packages in 2023 – partly by way of elevated duties on oil and coal exports – and is backing a invoice to ban fracking for hydrocarbons.

Ocampo, talking on the Colombian Enterprise Affiliation’s annual convention, mentioned he’s open to modifications to the tax invoice however won’t modify the quantity being sought, which will even assist scale back a fiscal deficit of some 80 trillion pesos.

Colombia gathered a virtually $6.5 billion commerce stability deficit between January and Could, up 20.5% on the identical interval a yr earlier.

The commerce stability is the highest purpose for a large present account deficit, which doubled final yr to $17.8 billion, equal to five.7% of gross home product. The central financial institution estimates that deficit will fall to five.1% of GDP this yr.

“The problem of exports is the primary precedence for the federal government by way of productive growth,” Ocampo mentioned throughout his presentation on the convention.

“The industrial deficit has deteriorated, it is a major problem,” he added. “We proceed to rely loads on oil and coal as exports and we have to radically diversify, it is an vital problem.”

Exports of oil and coal reached $15.6 billion through the first half of the yr and accounted for 54.5% of the nation’s exports.

Enterprise teams have mentioned the reform, which might elevate duties on firms by 12 trillion pesos ($2.8 billion), may harm funding.

“All these points we will debate and analyze if there are higher options, however the different is to not scale back the quantity,” Ocampo mentioned. “That different would not exist.”

($1 = 4,273.82 pesos)

(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Enhancing by Alistair Bell)



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