Colombia's Petro declares 30-day economic emergency after failed tax reform

President Gustavo Petro of Colombia declared the country in a state of economic emergency on Monday, signing Decree 1390 alongside his full cabinet. The declaration establishes a 30-day period during which the executive branch may issue decrees with the force of law to address what the government characterizes as an acute fiscal crisis that cannot be resolved through ordinary state mechanisms.

The emergency declaration follows the failure of Petro's most recent tax reform proposal in Congress. The government had sought to use the reform as a primary tool to finance public spending and address a projected budget shortfall of 41 billion dollars for 2026. With the reform blocked by legislators, the administration moved to invoke constitutional powers to pursue fiscal measures through executive action.

The declaration is grounded in Article 215 of Colombia's Constitution, which authorizes the president to assume temporary legislative powers when an extraordinary situation threatens the nation's stability. According to the government's framing in the decree, the country faces "a fiscal situation that acquired the character of grave, due to the occurrence of several supervening and concurrent economic facts that affect in an extraordinary manner the current situation of the nation's finances."

Finance Minister Germán Ávila first announced the government's intention to declare the emergency on Friday, though the formal signing did not occur until Monday after a three-day interval. The measure was announced as the government sought to address economic pressures including a fiscal deficit that has grown despite expectations for gross domestic product growth between 2.6 and 2.7 percent in the coming year.

The emergency declaration grants the executive authority to establish new taxes or modify existing ones during the 30-day period. The Constitution permits extension of such declarations up to 90 days within a calendar year if conditions warrant. The government has indicated its intention to obtain resources from high-net-worth individuals to help bridge the fiscal gap.

The measure has drawn opposition from business sectors and political opponents, who have characterized the use of emergency decree authority to implement tax increases as unconstitutional, arguing that such fiscal measures should require legislative approval rather than executive action during a declared emergency.