Tendencia Económica. No. 213

Abstract

Editorial: So far in January, different departments and cities have implemented new mobility restriction measures in an attempt to contain the spread of the COVID-19 and reverse the contagion figures resulting from the end of the year season. In this editorial, we estimate the economic cost and employment effect of the new restrictions. The results show an economic cost between 8.3 and 12.5 trillion pesos, equivalent to 0.8% and 1.2% of GDP, respectively. The sectors of commerce, artistic activities and financial activities would be the most affected. The labor market would be affected with an increase of between 0.6 and 0.9 percentage points in the unemployment rate (between 146 thousand and 220 thousand additional unemployed).

Actualidad: Globally, due to the Covid-19 pandemic, all economies suffered from a major shock to the aggregate demand caused by the loss of millions of jobs, in addition to changes in consumption patterns. Consequently, the inflation rate remained negative in several European countries and it showed low levels in the rest of the world. In Colombia, between march and august, the inflation rate went from 3,86% to 1,88%, ending the year in 1,61%, the lowest rate since 1955 and below the Central Bank’s target level. Specifically, it is observed that 4 of the 12 inflation categories registered negative annual rates. The greatest downward pressures took place in the categories of education, clothing and footwear, and furniture and household items. On the other hand, food and drinks, and the health sector were the ones that grew the most, having a significant contribution to the overall positive inflation rate. It is highlighted the role of the expansionary monetary policy for the final balance, and the need to reassess the inflation measurement in order to capture possible biases caused by the new dynamics of the basic consumption basket.