In a dramatic shake-up of Colombia's government, Finance Minister Diego Guevara has resigned just three months into his tenure, deepening concerns over the country's fragile public finances. His departure comes amid mounting tensions over budget cuts and just hours after lawmakers rejected a key labor reform backed by President Gustavo Petro.
Guevara announced his resignation in a post on X, describing his conversation with Petro as "calm and friendly" but offering no explicit reason for stepping down. However, a source within the presidential palace revealed that disagreements over fiscal policies, particularly budget reductions, led to his exit on Monday night.
This marks the latest in a series of high-profile changes under Petro, Colombia's first leftist leader, who has now replaced 12 of his 19 ministers. Analysts warn that the instability in his cabinet signals growing uncertainty for the nation's economy.
According to Caracol Radio, Guevara is set to be replaced by German Avila, head of Grupo Bicentenario—a government-backed holding company. But concerns are already mounting about Avila's experience in handling Colombia's complex financial landscape.
"The frequent cabinet reshuffles and the incoming minister's profile will heighten political and economic instability," Banco de Bogotá noted in an advisory, adding that the move could cast doubts over the central bank's anticipated interest rate cut.
Meanwhile, the Colombian peso weakened by over 1% against the U.S. dollar on Tuesday, closing at 4,118 even before the resignation news broke.
Earlier this month, Guevara hinted at possible further delays in budget spending as the government struggles to manage fiscal constraints that have already triggered major spending cuts. With his exit, concerns about Colombia's financial future are only growing.
