Economic Crisis: Effects in Colombia

Braulio Angulo

Lina Oviedo

Catalina CarmonaENGLISH V– 2009/2

Contens

1. General Concepts Origin Historial data

2. Colombia Effects

3. Industry sector and the crisis

ENGLISH V– 2009/2

Economic Crisis: Effects in Colombia

ENGLISH V– 2009/2

• WORLD CRISIS: TWO WAVES

August 2007: The housing bubble burst in the United States

September – December 2007: The Fed lowers interest rates

January – September 2008: The crisis extends to the overall financial sector

September 2008: It is the breaking point. Lehman Brothers fail

It triggers a crisis of confidence in the financial sector

October – December 2008: The governments of developed countries announced fiscal stimulus packages

January 2009: Developed countries officially entering recession

February 2009: The U.S. Congress approves the fiscal stimulus package

PRIMERA OLA

SE

GU

ND

A O

LA

Loss of briefcases in Europe generates the investors' aversion to invest in emergent countries

The hit countries are the clerks of it USES.

It decreases the growth. Devaluation of the rate of change to adjust external bills.

THE CRISIS IN COLOMBIA

• ARE WE PREPARED?

OUR STRENGTHS

Execution of the Banks of the regulations.

Invigoration of the patrimony of the banks.

Improvement internal processes of

administration of risks.

Consolidation of the system: Those

survived but strong.

Politics of Independence of the Main

Houses.

Not existence of speculative bubbles.

Comfortable situation of liquidity.

Moderate Fiscal deficit.

It appraises of Flexible Change.

Closed economy.

ENGLISH V– 2009/2

THE CRISIS IN COLOMBIA

• ARE WE PREPARED?

OUR WEAKNESSES

Rigid, slow and antiquated economy:

Strong blow = Long recovery.

Closed: Adjust of the demand it is but

traumatic.

There are not structural measures.

There was not saving in the upward part

of the cycle.

The shy measures generate distrust.

Exports: High dependence

Pyramids

ENGLISH V– 2009/2

ENGLISH V– 2009/2

Constr

uctio

n

Min

ing

Fina

ncial

Socia

l serv

ices

Electri

city,

Gas an

d it D

ilutes

Transp

ort

Agricu

ltural

Trade

Indu

stry M

anuf

actu

rer-15

-10

-5

0

5

10

15

20 16.8

10.2

4.3

0.5 0.1

-1.2 -1.8-3.9

-10.2

Annual percentage change of PIB by economic sectors 2008/II Vs 2009/II

Per

cent

age

vari

atio

n

Fuente: DANE- Dirección de Síntesis y Cuentas Nacionales

ENGLISH V– 2009/2

TituloB

eaut

iful

and

not

str

ong

mat

eria

ls

Suga

r gen

iuse

s

Car

pent

ry fo

r con

stru

ctio

ns

Dri

nks

Oth

er C

hem

ists

Mea

t and

Fis

h

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er T

exti

le P

rodu

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t art

icle

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ok

I gla

ze a

nd th

eir p

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cts

Oth

er in

dust

ries

man

ufac

ture

rs

Aut

opar

tes,

pie

ces

for v

ehic

les

Prod

ucts

of R

ubbe

r

Self

-dri

ven

vehi

cles

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ssis

Prod

ucts

of I

ron

and

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l

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er w

oode

n on

e

Oth

ers

of Im

pres

sion

-50

-40

-30

-20

-10

0

10

20

30

40

5041.3

15.5

6.6 6.5 4.9 3.7

-21.8 -23.8 -24.3 -25 -25.8-29.6 -31.1 -33.2

-37.5 -37.9-41.2

Main annual variations of the real production according to activity manufac-turer (January – Jule 2008 /2009)

Per

cent

age

vari

atio

n

ENGLISH V– 2009/2

Fuente: DANE- Dirección de Síntesis y Cuentas Nacionales

THE CRISIS IN COLOMBIAARE WE PREPARED TO FACE IT?• RECOMMENDATI

ONS

To avoid measures of short term and populists.

To watch over financial sector-Non intervention

of the BC in adjustment of Rate of Change.

Attraction of capitals stops after having

overcome the crisis.

Crisis: Opportunity to achieve goals.

ENGLISH V– 2009/2

Employment, Production and Sales

ENGLISH V– 2009/2

EFFECTS OF THE CRISIS IN THE MANUFACTURER INDUSTRY

• Decrease in exports• Decrease in financial resources foreign• Increased production costs (gasoline prices)

ENGLISH V– 2009/2

Effects of the crisis

• The rising unemployment (-6.1% March 2009)• fall of the dollar

ENGLISH V– 2009/2

BIBLIOGRAPHY• Radio Santafe. In economic crisis, most affected unions point to new

markets. October 10, 2009. Avalaible at :

http://www.radiosantafe.com/2009/10/10/por-crisis economica-gremios-mas-afectados-apuntan-a-nuevos-mercados/

• DANE. PIB. September 2009. Avalaible at: http://www.dane.gov.co/files/investigaciones/boletines/pib/presen_PIB_IItrim09.pdf

DANE. PIB. Bogotá D.C. Septiember 24, 2009. Avalaible at:

DANE. news bulletin: Manufacturing. June 2009. Avalaible at: http://www.dane.gov.co/files/comunicados/cp_pib_iitrim0http://www.dane.gov.co/files/investigaciones/boletines/mmm/bol_mmm_jun09.pdf

ENGLISH V– 2009/2