November 20, 2019 / 5:13 PM / 20 days ago

Colombia rules out selling off public stakes in companies in 2020

BOGOTA (Reuters) - Colombia is no longer planning to sell off 8.5 trillion pesos ($2.47 billion) in company participations to fund part of the 2020 budget, the finance vice-minister said on Wednesday, but will instead use central bank profits and larger tax collection to cover its needs.

The central bank is expected to make more than double the amount originally predicted this year, the product of yields on international reserves, mostly dollars.

The government will also need to transfer about 3 trillion pesos less to the public pensions administrator, as more people move their contributions from private funds, vice-minister Juan Pablo Zarate said.

“We now don’t need the privatizations for next year’s budget,” he told attendees at an economic forum in Bogota.

The announcement is likely to come as a relief to lawmakers, industry representatives and analysts who had criticized the possible sale of state assets in companies like oil producer Ecopetrol and conglomerate ISA.

Though the country is unlikely to meet the government gross domestic product growth target of 3.6%, it is growing well above average for the region, Zarate said.

“We are not going to achieve the growth targets that we had at the start of the year, but given the much-deteriorated international context, Colombia’s result is really striking,” the vice-minister said.

Latin America’s fourth-largest economy grew 3.1% between January and September and 3.3% in the third quarter.

The government has said it will launch a $23.2 billion holding company comprising 19 companies in which the government has stakes, including banks focused on agriculture and exports, to boost efficiency and improve portfolio management.

Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Marguerita Choy

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