ANALYSIS-Colombia economic reforms will be difficult, whoever wins presidency

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By Reuters

By Nelson Bocanegra

BOGOTA, May 25 (Reuters) - Whoever wins Colombia's presidency will face a divided congress and likely street protests, which will complicate efforts to carry out badly-needed fiscal and social reforms, analysts and politicians said.

Colombians vote on May 29 amid high polarization and grating inequality worsened by price rises, despite an incipient post-pandemic economic recovery.

Leftist Gustavo Petro, a former guerrilla and current senator, is leading his center-right rival Federico Gutierrez by about 10 points in opinion polls, though the contest looks set to go to a second round in June.

Petro is backed by many poor and working class Colombians but viewed with suspicion by investors, who say his plans to halt new oil development and redistribute pension funds would put economic stability at risk.

Gutierrez - known as Fico - has more of the kind of conventional centrist polices that investors prefer. He has proposed anti-tax evasion measures, cuts to government operating costs, and a gradual $2.5 billion tax reform to help Colombia regain its debt investment grade.

But either candidate would take office with a congress split among a dozen parties and a $15 billion fiscal deficit, equivalent to about 6.2% of gross domestic product.

The pluralist make-up of Congress obliges the president to reach consensus with parties that aren't on their side of the ideological spectrum, said Fedesarrollo thinktank director Luis Fernando Mejia.

We don't see a candidate so far who would have more ability to generate that consensus, it would all depend on their leadership.

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