How does the pandemic affect Columbia economy. Mathematics & Economics

University Writing 1020-M5
Professor Malone-France
5 November 2020
Pandemic and Colombian Economy
Travel restrictions and interaction restrictions due to Covid-19 pandemic and limits on movement through partial or full lockdowns affect consumer expenditure and industries that depend on the physical presence of customers or clients. The first case of coronavirus in Colombia’s first case of coronavirus was detected in March 2020 when a lady arrived from Italy with covid-19 symptoms and Ivan Duque tasked the local and regional authorities to take measures and address the health challenge. Later there were restrictions on movements and interactions, and some of the most affected industries are the travel, transportation, tourism, and restaurant industries. There has been a slowdown in the transport systems, as there are fewer people using transportation services, which has meant that there are dwindling revenues. Air transport, freight transport, and urban transport are all affected. This is further complicated by the lack of government assistance to support the affected industries at a time when there are fewer government revenues and expenditure.[Translated by ContentEngine, L. L. C. "They Confirmed the First Case of Coronavirus in Colombia." CE Noticias Financieras, English ed. ed., Mar 06 2020, ProQuest. Web. 21 Oct. 2020 .https://search-proquest-com.proxygw.wrlc.org/docview/2373497820?accountid=11243&rfr_id=info%3Axri%2Fsid%3Aprimo] [Julian Arellana, Luis Márquez, and Victor Cantillo. "COVID-19 Outbreak in Colombia: An Analysis of Its Impacts on Transport Systems." Journal of Advanced Transportation 2020 (2020).Web 28. Oct.2020/journals/jat/2020/8867316/]
The economy faces a drop in revenue due to major industries failing to run at full capacity when fewer spend and industries slow down activities because of falling consumer demand. Private consumption has fallen drastically and there has been a slowdown in government expenditures, which caused a reduction in government consumption and a decrease in private consumption and public investment, which are important parts of the aggregate demand, partly explain the economy’s contraction in 2020 contraction. The government is faced with the choice of budget austerity measures or seeking loans finance economic stimulus programs from global financial institutions such as the IMF.
Lockdowns have had a direct impact on the decline in the country’s economic output and outlook because of decreased consumer demand, supply chain disruptions, and the loss in productivity. Lower production and sales have meant that there is reduced capacity for private businesses to employ people, where disruption in the supply chain has affected the production sector. The fall in GDP is estimated at 7.4%, which is higher than the same period of the previous year, that the county has recorded huge job losses with unemployment above 20%.[Coronavirus: What Is The Impact In Colombia? - Justice For Colombia", Justice For Colombia, 13 Oct 2020. Web 28.Oct.2020. https://justiceforcolombia.org/news/coronavirus-what-is-the-impact-in-colombia/.]
Thus, the fall in consumer demand and disruption in the supply chains have resulted in a higher than expected unemployment rate as the economy is contracting.
Restrictions on movements and lockdowns have meant that consumer expenditure has declined and coupled with rising unemployment, there are fewer opportunities to stay in business and expand. According to the IMF, the economic effects of the pandemic are already evident in Latin America as the pandemic has caused one of the largest declines in history in Latin American and the Caribbean estimated at 9.4% in 2020. 2020 is a year marked by uncertainty on the next way forward regarding government assistance, tax cuts, and consumer stimulus and budget austerity measures. Some businesses have had to close down because they are no longer competitive and it will take time to revive them so that they return to profitability.[Mauricio Cárdenas and HumbertoMartínezBeltrán, "COVID-19 In Colombia: Impact And Policy Responses", Center For Global Development, 24 July 2020, /publication/covid-19-colombia-impact-and-policy-responses.]
Businesses are facing a t...