This is how the Fitch Ratings agency sees Colombian departments

The competition law that the Government of Gustavo Petro will have to pass this year to complete the Legislative Act that seeks to modify the General Participation System (SGP) will be crucial for the analysis of the solidity of income and the sustainability of spending in the different Colombian departments.

This is confirmed by a recent report from the risk rating agency Fitch Ratings, which states that the departments would maintain a stable operational performance in 2025 despite the existing risks.

In parallel, Fitch says it will closely monitor the repercussions of the constitutional decision that removes unilateral borders for departmental liquor monopolies and its effect on departmental finances.

Fitch currently rates eight Colombian departments. At the end of 2024, seven of them obtained a stable rating outlook (Atlántico, Antioquia, Valle del Cauca, Caldas, Bolívar, Magdalena and Córdoba) , while Boyacá maintained a positive one supported by the improvement in its debt sustainability.

Among them, the department of Magdalena experienced an increase in its rating, while the department of Valle del Cauca had a reduction.

The rating agency also highlights that the debt level of the departments increased by 23 percent from 2022 to 2023 because debt continues to be a relevant source of funding for development plans.