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Colombia to delay $2.44B in spending due to oil price fall

Colombia to delay $2.44B in spending due to oil price fall

Posted by Juan Gavasa on February 23, 2015

Colombia will delay spending $2.44 billion (6 trillion pesos), some 3% of its national budget, due to a sharp fall in oil revenue, the government said on Saturday.

The cutbacks, consisting of $1.95 billion (4.8 trillion pesos) in investments and $488 million (1.2 trillion) in administrative costs, were approved by the cabinet, the government said in a statement.

The move takes into account “new macroeconomic and fiscal conditions, associated primarily with the fall in international oil prices,” the statement said.

The $1.95 billion investment cut represents 9.7% of the country’s allotted budget for general costs, including much-needed infrastructure improvements. The government will now invest a total of $18 billion (44.7 trillion pesos) in 2015.

The other portion of the cutback, of $488 million, will affect administrative spending.

Colombia’s tax and royalty revenue has been battered by a 60 percent fall in global crude prices since June. Oil is the biggest export and source of foreign exchange for the country.

Congress approved a $88 billion (216 trillion peso) national budget for 2015 last October.

If fiscal conditions change, the funds may again be made available, the statement added.

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