The cost of the national strike in May 2021 is approximately 1.5 times higher than the effect of the national trucking strike in 2016.
Fedesarrollo revealed a report calculating the impact that unemployment has had on Colombian economic activity. For the estimate, the entity took into account and compared the effects of the transporter strike that occurred between June and July 2016. In addition, the supply levels in the main wholesale centers and the demand for unregulated energy were analyzed.
“We estimate that the economic cost of the national strike in the month of May ranges between 4.8 and $ 6.1 billion. However, a prolongation of the blockades would imply an economic cost higher than the estimated, “said Luis Fernando Mejía, director of Fedesarrollo.
#Comunicado Our calculations indicate that the economic cost of the national strike in May was from 4.8 to 6.1 trillion pesos, the sectors most affected being commerce, industry and agriculture, which represent 80% of the total cost. More information: pic.twitter.com/eTRkPC85tL
– Luis Fernando Mejía (@LuisFerMejia) June 3, 2021
The report reveals that, while in the unemployment of 2016 the supply level in July decreased by about 12.9% annually, in May 2016 it fell by 19.3% (compared to May 2019), showing an effect 50 % higher than that registered in the previous strike.
In addition, the annual variation in the demand for unregulated energy presented an annual contraction of 6.3% in July 2016, while in May the reduction was 10.1%.
In other words, Fedesarrollo concludes that the cost of the national strike in May 2021 is approximately 1.5 times higher than the effect of the national trucking strike in 2016.
The shortage of inputs and the cessation of activities were the channels through which industry, commerce, and agriculture were most affected. These three sectors account for 80% of the total estimated cost. But, the limitations due to the closure of the roads would also have impacts on construction, mining, energy supply and, to a lesser extent, professional and entertainment activities.
However, Fedesarrollo announced that the growth forecast for the Colombian economy in 2021 would be revised upwards despite the public order situation that the country is experiencing.
“The surprising growth data in the first quarter of the year, the acceleration of the vaccination process in recent weeks and the low comparison base in 2020 mean that the GDP growth rate in 2021 would be higher than the 4.8% we forecast at the beginning of the year, ”Mejía said.
