Colombia joins Latin America’s shift to the right

The victory for right-wing Abelardo de la Espriella in Colombia’s presidential election should pave the way for more pro-business policymaking, tighter fiscal policy and improved relations with the US, which should support Colombian assets. We think local currency government bonds in particular have room to rally in the near term. That said, the scale of Colombia’s fiscal problems and the fractured legislature mean that it will be difficult for de la Espriella to carry out the austerity needed to prevent the debt ratio from rising.