Overall economic activity hit during this year’s national strike has regained its momentum and, since June, is exceeding 2019 pre-crisis levels. Tertiary activities, which could be broadly understood as aggregating services, is the driving force in the economy right now. In primary activities, agriculture was one of the few sectors able to grow last year, and continues to grow in 2021. But oil & mining is struggling: activity tumbled last year, and recovery in 2021 has been tepid, which means performance of these sectors remains well below 2019 levels. In secondary activities, manufacturing fell hard in 2020, but the rebound has been equally robust, and by Q3 had surpassed 2019 levels. Construction was a laggard. It also fell hard in 2020, but recovery this year leaves much to be desired. In tertiary activities, commerce and transport are finally surpassing 2019 levels, as is public administration. Financial services began powerfully rebounding in the second part of 2020; this sector is now performing head and shoulders above 2019 levels. With 0.22% of GDP of higher revenues, expenditures on track to underperform the official forecast and a larger GDP by year end, this year’s central government deficit could be closer to 8% of GDP than to the 8.6% target. Strong economic activity recovery is also boosting tax revenues.
March 2022 congressional elections will serve as a presidential “ground zero”, since these and other multiparty elections are likely to winnow the myriad presidential candidates now preparing to run. The composition of the next Congress will also have a crucial effect. Even if opposition candidate Gustavo Petro loses the presidency, he could inflict quite a bit of damage to Colombian democracy if his and other anti-establishment parties were to substantially increase their representation in Congress. Devastation of congressional reputation, social discontent, recent recessions and the shocking effects of the pandemic are the reasons many people think that an anti-establishment vote will shake Colombian politics in 2022. We examine several scenarios, including one in which anti-establishment congressional representation would increase from 24% to 31%. How governable would Colombia be in this latter case? Apparently, the institutional answer is “fair enough.” Yet the three scenarios we examine highlight humongous risks within Colombian politics.
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