De la Espriella in pole position but faces hurdles

The strong showing for right-wing candidate Abelardo de la Espriella in the first round of Colombia’s presidential election will be welcomed by investors. A further rally in the peso and a decline in bond yields are likely later today. If de la Espriella wins the second round on 21st June, his presidency would lead to more pro-business policymaking, tighter fiscal policy and improved relations with the US. But the scale of Colombia’s fiscal problems and the highly-fragmented congress will make it difficult to push through the scale of austerity needed to stop the public debt-to-GDP from rising during the next presidential term.