Throughout the week, different economic projections emerged. Nothing encouraging the panorama. For example, a United Nations study found that 81% of the global workforce, something like 3.3 billion people, was either partially or totally closed. In the United States, it went from a situation of full employment to projections that speak of 16 million unemployed people and a figure that would quickly reach 25 million people.
In Italy, according to ISTAT, nearly half of Italian companies, which in turn hire 7.4 million workers, are on standby . In addition, it is believed that the GDP of that country could fall up to 10 points. In Spain, a strong economic contraction is also projected. But the most dramatic fact that was known was that of the World Trade Organization (WTO). According to them, world trade could fall between 13% and up to 30%, which could mean millions of unemployed people. Finally, Bloomberg considers that the chances of recession in the next 12 months are 100%.
Thus, the economy enters intensive care. Obviously in Colombia the situation is quite complex. There are four data that concern the country. Firstly, oil income. A price of $ 60 was projected in the Development Plan; Currently its price is volatile, but it will surely park between $ 30 and $ 35 at most for several months. The blow will be strong since the Ecopetrol company is a fundamental part of the national budget. Second, the tax and royalty settlements of many private oil-mining companies will fall. In other words, less money for the State. Third, the government's public debt reaches 51% of GDP, too high to be in times of crisis. Finally, important sectors of the economy will not recover as quickly. The hotel, tourism and general economic contact activities, such as in restaurants, cinemas and bars, will suffer for several months.
In short, the panorama is not at all encouraging. Although nobody knows the depth of the crisis, the real impacts and the duration of the restriction measures, the truth is that the country's economic outlook is complex. Just as the curve must be flattened to avoid a health crisis, it is also necessary to flatten the curve of an economic crisis. And while it is impossible to avoid such a crisis, it is possible to mitigate. The way to do it is a vigorous State that injects large sums of money into the productive apparatus.
Basically, the Colombian State has four alternatives. On the one hand, relaxing the fiscal rule and thereby guaranteeing money flow. However, with the reduction of taxes derived from the tax reform of a few months ago that benefited large entrepreneurs, and with the fall in oil prices, the reduction in income will be very strong. The second alternative is to get into debt, but as we saw before, the public debt is high and getting more debt would be taking many risks. A third alternative is to strongly cut the budget on some items and move them to others, but this could lead to the firing of contractors and increase unemployment, which could reach 20 points in a matter of weeks. The other alternative is to use international reserves, it is where we are best.
In short, there is a need for cash and the alternatives are very closed. Everything will depend on the government's bets and its economic calculations. Any decision you make will bring costs and benefits. The truth is that the economic projections for the next 18 months are simply disastrous, there will hardly be light at the end of the tunnel before the end of 2021.
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