Quick answer: Since August 7, 2026, Colombia’s new government under Abelardo de la Espriella has frozen public spending as the first step of a fiscal adjustment close to COP $60 trillion (~3% of GDP), announced by Finance Minister-designate Miguel Gómez Martínez. The measure doesn’t close programs already underway, but it freezes execution of budget items that hadn’t started yet — with explicit focus on service contracts and tenders that hadn’t begun. If your company holds contracts with the state, this can affect you directly.
Table of Contents
- What the Government Decreed
- Why the Measure Was Taken
- What “Freeze” Actually Means in Practice
- The Explicit Focus on Service Contracts
- How It Can Affect You Depending on Your Business
- What to Do If Your Company Has State Contracts
- What’s Next: September’s Tax Reform
- FAQ
What the Government Decreed
On August 7, 2026, the day Abelardo de la Espriella was sworn in as president of Colombia, his government decreed a freeze on public spending as its first fiscal adjustment measure. Finance Minister-designate Miguel Gómez Martínez had confirmed the move in advance, proposing an initial adjustment close to COP $60 trillion, roughly 3% of Colombia’s GDP.
As part of the same plan, Gómez Martínez proposed cutting the number of government ministries from 19 to 13 — a restructuring of state institutions that would require additional reforms to align the administrative structure with the country’s real fiscal capacity.
The measure drew immediate reaction. Former president Gustavo Petro publicly questioned the size of the adjustment, calling it risky for education and healthcare and warning of a potential recessionary effect on the economy — a sign the political debate over the freeze’s real scope will continue in the coming weeks.
Why the Measure Was Taken
Minister Gómez Martínez grounded the decision in concrete recent fiscal figures: between January and April 2026, the Colombian state spent an average of COP $40 trillion per month, while revenue reached only COP $28 trillion per month. That monthly gap of COP $12 trillion has been covered with additional borrowing, pushing public debt to levels the new government considers unsustainable without an immediate correction.
For a business, this matters beyond the political moment: a deficit of this size, sustained over several months, is exactly the kind of fiscal pressure that tends to precede tax adjustments, interest rate changes, and spending reviews that end up affecting both the public and private sectors.
What “Freeze” Actually Means in Practice
It’s worth understanding what does not change under this measure before looking at what does. According to the ministry itself, the freeze does not close programs already in execution. Essential government spending continues to operate normally.
What the measure does freeze:
- Execution of budget items that hadn’t started yet
- Approved programs and projects that had not begun execution as of August 7
- New contracts and tenders that weren’t already underway before the decree
The stated goal is to first build a real inventory of the state’s obligations — identifying what commitments exist, with whom, and for how much — before deciding what stays, what gets cut, and what gets restructured. For businesses, this translates into a period of administrative uncertainty while that inventory moves forward, particularly for any contractual relationship with public entities that wasn’t already in active execution.
The Explicit Focus on Service Contracts
Minister Gómez Martínez specifically flagged service contracts (órdenes de prestación de servicios, or OPS) as a priority review area, citing figures from the Comptroller General: in January 2026 alone, 523,000 of these contracts were signed for a value of COP $33 trillion — a volume the new government considers opaque and in need of an audit.
This matters for any company or independent professional providing services to the state under this modality — advisory, consulting, technical services, administrative support — because these are precisely the contracts facing the most scrutiny during the freeze, especially those that hadn’t started execution at the time of the decree.
How It Can Affect You Depending on Your Business
If your company already has active contracts with the state:
The government has been explicit that these aren’t being closed. The risk here is more administrative than contractual — possible payment or processing delays while agencies adjust their internal processes to the new austerity framework.
If your company had a contract or tender awarded but not yet started:
This is the group with the highest direct exposure. Execution of items that hadn’t started is exactly what the decree freezes while the review takes place. It’s worth confirming the real status of your contract directly with the contracting agency.
If your company is in the process of bidding on a public tender:
It’s reasonable to expect delays in opening new processes while the government completes its inventory of existing obligations, especially in the first weeks after August 7.
If your company has no direct contractual relationship with the state:
The effect is indirect but real: a fiscal adjustment of this size tends to moderate the public spending circulating in the economy, which can be felt in sectors that depend on public investment (construction, infrastructure, government consulting) even without a direct contract involved.
What to Do If Your Company Has State Contracts
- Confirm your contract’s execution status in writing with the contracting agency — don’t assume you’re protected just because the contract was signed before August 7.
- Review early-termination and force-majeure clauses in your active contracts with public entities, to understand your rights if there’s a suspension.
- Document every pending payment and every communication with the agency — during an administrative restructuring period, having clear records is your best protection.
- Don’t sign contract amendments without legal advice, especially if the agency proposes them as part of adjusting to the new austerity framework.
- If your business depends significantly on state contracting, diversify your revenue stream while this initial uncertainty lasts — the ministerial restructuring (from 19 to 13 portfolios) could also change which agency administers which contracts.
What’s Next: September’s Tax Reform
It’s important not to confuse the spending freeze (an administrative measure already in effect since August 7) with the tax reform the new government has confirmed it will submit to Congress in September 2026, not August. The spending adjustment is the first phase of the new government’s fiscal strategy; the tax reform, which will likely include changes to rates or the tax base, comes later and deserves its own analysis once the filed text is known.
For this year’s income tax filing season (which opened August 12), it’s important to be clear that the rules in effect for tax year 2025 don’t change because of this decree — the freeze is a budget-execution measure, not a modification to the Tax Code.
When to Seek Legal Advice
It’s worth consulting a lawyer specialized in government contracting or corporate law if:
- Your company has a contract with the state that hadn’t started execution as of August 7
- You’ve received or expect to receive a communication from the contracting agency about changes to your contract
- You’re evaluating whether to bid on a new tender during this transition period
- You’re unclear on how the ministerial restructuring affects the agency you contract with
At Nexo Legal, we help Colombian companies review their contractual exposure to the state, understand the real risks of the spending freeze, and make informed decisions while the new government defines the final scope of the adjustment. If your company depends on public contracting, contact us before an administrative decision catches you off guard.
FAQ
What is Colombia’s public spending freeze decreed on August 7, 2026?
It’s the first fiscal adjustment measure under Abelardo de la Espriella’s government, freezing execution of budget items that hadn’t started yet while the state builds an inventory of its real obligations. It doesn’t close programs already in execution.
How large is the announced fiscal adjustment?
Finance Minister-designate Miguel Gómez Martínez proposed an initial adjustment close to COP $60 trillion, approximately 3% of Colombia’s GDP.
Why was this measure decreed?
Because between January and April 2026, the state spent an average of COP $40 trillion per month against revenue of only COP $28 trillion per month — a deficit covered with borrowing the new government considers unsustainable.
Does this affect my company if I have an active contract with the state?
Contracts already in active execution aren’t being closed, according to the government. The biggest risk is for awarded contracts that hadn’t started execution as of August 7.
What are service contracts (OPS) and why are they under scrutiny?
These are contracts under which the state engages people or companies to provide services without a formal employment relationship. The ministry cited that 523,000 of these contracts were signed in January 2026 alone, worth COP $33 trillion, and announced greater scrutiny going forward.
Is this the same as the new government’s tax reform?
No. The spending freeze is a budget-execution measure already in effect. The tax reform is a separate bill the government confirmed it will submit in September 2026, not August.
Do the rules for the 2026 income tax filing season change because of this decree?
No. The spending freeze doesn’t modify the Tax Code or the rules in effect for the 2025 tax year filing.
Nexo Legal helps Colombian companies review their contractual exposure to the state, understand the real risks of the spending freeze, and make informed decisions while the scope of the adjustment is still being defined. If your business depends on public contracting, our team can help you assess your exposure before an administrative decision catches you off guard.
Published: August 2026 — Nexo Legal
Sources: Infobae — Miguel Gómez Martínez confirms public spending freeze | Portafolio — New government’s austerity strategy | Infobae — Tax reform to be submitted in September