IMF suspends flexible credit line for Colombia

The International Monetary Fund (IMF) announced that as of Saturday, April 26, it has suspended the Flexible Credit Line (FCL) for Colombia.

“Beginning April 26, 2025, Colombia’s continued rating under the IMF’s Flexible Credit Line (FCL) is contingent upon the completion of the ongoing Article IV consultation and a subsequent midterm review of the FCL. The FCL arrangement was approved on April 26, 2024, for a two-year period, with an interim review to assess the continued rating,” the IMF explained in a statement.

But what does this mean? The continued availability of the IMF credit depends on two factors being met. First, the completion of the consultation on the country's economic health (a review conducted on all member countries) and a review to determine whether Colombia continues to meet the criteria for access to the credit line, which include sound economic policies and robust macroeconomic fundamentals.

In response to the IMF's announcement that it was suspending flexible credit to Colombia, President Gustavo Petro wrote on his X account: "The vampires are coming, but vampires disappear before the sun, Georgieva," responding to IMF director Kristalina Georgieva.

Former Finance Minister Mauricio Cárdenas said: "This is the worst message for the financial markets. We're running out of spare tires just when the global economy is fraught with uncertainty."

Cárdenas added that the flexible credit line was the greatest insurance available to the Colombian economy, adding that the IMF's reason for this was the lack of a fiscal plan. "The IMF is seeing Colombia's situation very badly. Difficult times are coming," the former head of the ministry stated.

The president of the Colombian-American Chamber of Commerce (AmCham) Colombia, María Claudia Lacouture, also spoke out, warning that “the temporary suspension of Colombia's access to the IMF's Flexible Credit Line, an 'emergency credit card,' is a clear warning. Although we have not lost all support, it is urgent to correct the fiscal deficit, control spending, and strengthen growth. The time to act and restore confidence is limited.”

For his part, former Minister of Finance and Trade, José Manuel Restrepo, said this is not good news for Colombia, saying, "The policy has always been one of support and confidence in macroeconomic policy."

The president of the National Association of Industrialists (ANDI), Bruce Mac Master, was also quick to comment. "The International Monetary Fund's decision to suspend contingent credit for Colombia is very bad news," he stated.

Among the arguments put forward by the IMF is that public deficits and public debt have increased more than expected. They argue that the central government's overall fiscal deficit rose to 6.7% of GDP in 2024, up from 4.2% of GDP in 2023, representing an increase of 1.1 percentage points above the target set by the authorities in the medium-term fiscal framework.

Washington notes that liquidity restrictions also contributed to a buildup of large budget arrears, equivalent to 2.8% of GDP. The IMF left open a possible dialogue.