Fall in household income would be $ 30 billion with isolation until June

According to the economic comment of the National Association of Financial Institutions (Anif), the arrival of Covid-19 in Colombia and the preventive isolation measure until May 11 will generate a drop in household income of nearly 10 billion pesos.

In addition, the institution warned that this figure may increase to about 30 trillion pesos, corresponding to 2.7% of the country’s Gross Domestic Product (GDP), if the isolation is extended until June.

“Of course, these effects can become devastating if severe isolation continues, as they directly impact employment, poverty, growth and, above all, the ability of the most vulnerable households to satisfy their most basic needs, such as food. “Anif explained.

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For the study center, the measures adopted so far by the management of the situation are adequate, because they seek to provide liquidity to the economy, especially to households, protect the stability of companies and, therefore, employment .

However, Anif warned that these measures “have fallen short” due to the magnitude of the problem, which is why more and more liquidity will be needed and, according to the organization, the government “is not in a position to inject.”

Faced with discussions about the work of banks and reports of difficulties in accessing financing by individuals and companies, Anif pointed out that, when working with depositors’ resources, the banking sector must guarantee the security of household deposits. and companies to make these available when they are needed.

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For this reason, he cataloged as “populist” the proposals of some sectors related to the option of not paying total debts due to the situation because, if it happened, this would affect not only the bank, but the economy in general.

“The fact of having a healthy financial system is a great asset for the country and, with more reason, in the crisis that we are experiencing due to the spread of the pandemic,” the agency analyzes.

Regarding the option of using the Colombian pension savings resources to finance the attention of the pandemic, Anif assured that it is an inconvenient measure and that it will generate distrust on the part of the members of the system.

“There is concern that proposals related to the use of the resources that workers have accumulated and found in their individual pension savings accounts in the pension administrators (AFP), to face the shock unleashed by the virus, are aired,” said the economic comment.

In conclusion, for Anif, having a healthy financial system is one of the fundamental pillars of any economy, including the Colombian one; proposals to promote total defaults on loans are a threat to savers; And implementing any of these proposals could lead Colombia to a financial crisis.