Colombia IVA adjustment to push inflation above 6.4% in 2026

Colombia's Rescue Law project includes an IVA (VAT) adjustment that the government acknowledges will add 1.3 percentage points to inflation, pushing the cost of living above 6.4% next year. The measure is part of fiscal reform efforts, but it risks entrenching above-target inflation and complicating central bank policy. The exact scope of the adjustment and its timing remain uncertain.

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