The economic blow of the pandemic is long overdue: analysts predict how Colombia will recover in 2021

This week the Dane released a report on the performance of the economy up to the third quarter of the year, a document that left several conclusions from analysts in the banking and government sectors. After reviewing the data, Analysts have estimated that the Colombian economy will drop 8% by the end of 2020. Furthermore, they predicted that the country’s commercial sectors will have an uneven and slow recovery.

One of the data these analysts relied on to come to this conclusion was the decline in GDP, which had an impact on the -twenty%. This means, according to Semana Magazine, that the average Colombian has an annual income of $ 18,891,269 pesos, an alarming figure from last year, which was $ 23,614,086 pesos per year.

“Published GDP data indicate the challenges facing the economy in the current phase of coexistence with the pandemic and are an indication of the recovery process we have started: prolonged, irregular and uncertain “, Juan Pablo Espinosa, head of research at Bancolombia, assured Semana

These GDP figures indicate a recovery of 90% compared to levels recorded before the pandemic. However, there are sectors that experience a 70% or 80% recovery. This explains why analysts report an inequality in how sectors of the Colombian market are recovering.

Among the Colombians most affected by the pandemic, according to the data, are people who work in the informal sector, followed by young people and, finally, by women.

The government expects, according to the Ministry of Finance, a contraction of the economy of -6.8% and a recovery of 5% for next year. This means that the economy will continue to contract by -1.8% over the course of 2021. For the government, the data mean a moderate recovery in the economic sector.

Furthermore, according to the analysis carried out by Semana Magazine, the government will have to take out more loans to finance the expenses deriving from the pandemic, which would also affect international investments in the country by 2021.

The banking analysts’ point of view is more frank, they estimate it The economy will recover by 4.6%, which means that Colombia can only have good economic recovery data until 2022.

The data

The Dane report reflects that the sectors still have alarming effects. For example, in air transport records a deficit of -76.1%; followed by accommodation and catering services with -45.8%, accompanied by the raw materials sector which falls by -44.1% and there is also a decrease of -15.1% in oil.

The drop in consumption by Colombians is added to the decline in the various sectors of the country. This consumption decreased, in the third quarter of the year, -8.9% in sectors such as clothing; transport, restaurants and hotel services.

Another sector that has been hit is exports, which continue to be in deficit due to low external demand and lower prices for some products such as coal and oil.

Finally, there is the housing sector which, according to an analysis by BBVA Research delivered in Semana, the rainy season would affect the sector delaying the projects in progress.

Although the data shows a slow recovery and with several variations, the government is the only sector that has maintained positive spending, the newspaper said.