Colombia: Petro declares 30-Day economic emergency
Wednesday, December 24th 2025 – 10:40 UTC
Petro warned that the Constitutional Court repealing his measure would trigger a serious economic crisis
In a move to bypass Congress on his proposed tax hikes, Colombian President Gustavo Petro declared a 30-day economic emergency on Tuesday. The measure, enacted via Decree 1390 of 2025, grants the head of State extraordinary powers for 30 days to circumvent Parliament and impose new taxes on the country’s wealthiest citizens.
The declaration follows the second rejection of Petro’s tax reform by Congress, leaving a deep hole in the 2026 national budget. Petro justified the drastic measure by warning that Colombia faced an imminent fiscal crisis and an unsustainable debt burden that could jeopardize essential public services, including healthcare, the judiciary, and national security.
If there is no emergency, there will be cuts, Petro stated bluntly. He argued that public investment was being propped up by debt rather than revenue, with the fiscal deficit expected to exceed 7% by the end of 2025.
Petro specified that the emergency powers will be used to target the super-rich, a demographic he claims has disproportionately benefited from past economic policies. The leftwing government aims to raise approximately US$4.19 billion through special taxes established by regulatory decrees in the coming days.
The President framed the move as tax justice, insisting that those with large profits must contribute to preventing a state-wide financial collapse. He has also floated the possibility of lowering salaries for members of Congress as part of the emergency package.
The decree has ignited a firestorm of criticism from the opposition and the business community, who view it as a constitutional overreach, claiming that for an economic emergency to be valid, the law requires an extraordinary and unforeseen situation. Absent that case, Petro would be abusing power to skip the democratic debate.
Colombia’s Constitutional Court now holds the fate of the decree. If it finds the emergency does not meet the untimely disruption threshold, it could strike down the measure. Petro warned that such a rejection would send the country’s risk rating soaring and trigger a serious economic crisis.
In this scenario, the National Association of Companies of Colombia (ANDI) and the Colombian Chamber of Construction warned that the move creates legal uncertainty that could stifle investment.
Petro also claimed that the Banco de la República’s (Central Bank) interes rates at 9.25% further exacerbated the debt crisis. Finance Minister Germán Ávila added that the lack of funds currently posed a risk to emerging public security issues related to organized crime, framing the tax hikes as a necessity for national defense.
