Colombia’s public debt could surge to 66.6% of GDP by 2027 if the next government fails to enact a large-scale fiscal adjustment, the country’s independent fiscal watchdog, the Comité Autónomo de la Regla Fiscal (CARF), warned on Thursday. The projection, contained in its formal review of the government’s medium-term fiscal framework, marks a sharp break from official estimates and pushes the debt trajectory dangerously close to the 71% limit set by Colombia’s fiscal rule. The committee also calculated that without corrective measures, the fiscal deficit would reach an “unsustainable” 7.4% of GDP this year, nearly double the government’s own target.

The divergence stems from what CARF describes as overly optimistic macroeconomic assumptions in the government’s plan. While the finance ministry projects a primary deficit of 2.1% of GDP for 2026, the watchdog estimates the gap at 4.1%, driven by spending on operations and investment that it says will overshoot official figures by 39.6 trillion pesos. CARF did not incorporate announced but not yet implemented spending cuts, noting that 58.1% of the flexible investment budget was already committed by May. To meet the 2027 fiscal target, the committee calculates that the incoming administration would need to find savings or new revenue equivalent to 3.7% of GDP—a task made harder by the absence of a concrete tax reform proposal, which the current government has promised to present to Congress on 20 July but has yet to detail.

The Colombian warning arrives amid a broader reassessment of sovereign creditworthiness across several regions. In France, Insee reported that public debt reached 117.5% of GDP in the first quarter of 2026, up from 115.6% at end-2025, placing it among the eurozone’s most indebted states behind Greece and Italy. Ukraine’s finance ministry, meanwhile, projects a record budget deficit of 2.04 trillion hryvnia in 2027, relying on $47.6 billion in external assistance to bridge the gap. In Buenos Aires, Argentina’s Treasury is preparing a critical debt auction on Friday to roll over 16.2 trillion pesos in maturities, offering a menu of inflation-linked, dollar-linked, and dual bonds to sustain market access. Analysts at Eafit University in Medellín note that Colombia’s own financing costs have been transformed by a loss of investment grade and a series of rating downgrades, with yields on 10-year peso bonds remaining above 13% for much of the year, even as a well-bid auction this week saw rates ease.

The immediate focus in Bogotá now shifts to the political calendar. The current government has pledged to file a tax reform bill in late July, but CARF stressed that announcements alone will not restore market confidence. The committee’s baseline scenario, which assumes the next government implements the necessary adjustment, still sees debt rising to 62.9% of GDP in 2027. The alternative, it warned, is a debt path that continues climbing for a decade, leaving net debt three percentage points higher by 2037 even if targets are met from 2027 onward. The next factual milestone is the 20 July legislative deadline, followed by the transition to a new government that will inherit a fiscal position CARF describes as requiring “urgent measures of great magnitude to avoid a fiscal crisis.”