The Colombian government has declared a state of 'economic emergency' for 30 days after Congress rejected a tax reform bill on December 9. The executive had sought to raise 16.3 trillion pesos (about $4.29 billion) through the reform to complete the 2026 national budget. In Decree 1390 of 2025, President Gustavo Petro's government declared 'a state of economic emergency nationwide for a period of 30 calendar days, counted from the effective date' of the decree. The executive states that this declaration, which will allow it to establish new taxes or modify existing ones, aims to address 'the material and legal inability to guarantee, in a continuous, timely, and sufficient manner, the effective enjoyment of some material rights and the provision of essential public services' due to 'a fiscal situation that has become serious.' Petro, for his part, defended the economic emergency declaration before the decree was published, arguing that Colombia has had a 'primary deficit in public finances' since the government of President Juan Manuel Santos (2010-2018). He also criticized Congress for 'knocking down for the second time the financing bill (tax reform) presented by the government' and the Bank of the Republic (central bank) for keeping the basic interest rate unchanged at 9.25%, a level in effect since April. In his opinion, these two facts 'trigger the rise in the risk rate on our debt and make it impossible to stop the unsustainability of the debt.' 'The conditions of the emergency for this fact are evident, and if the Constitutional Court also decides to strike down the decree, then the country risk rate will be greater and the unsustainability of the debt will become present with a serious economic crisis.'
