In the midst of the discussion about the projects to reform the social security system that the Government is promoting, U. Eafit presented an analysis of the joint impact that the labor, pension and health reform would bring.
According to the institution, these could “cost up to 1% of growth per year and, in the long term, 2.5% in terms of unemployment and fiscal deficit”.
(Also read: Why calculating the fiscal cost of reforms is a ‘tough nut to crack’.)
This was announced in a report on ‘Situation and perspectives of the Colombian economy’. Among the estimates of the university is, for example, that although by 2023 there would be no impact from the reform package, and the GDP would grow 1.3%, from 2024 growth points would be lost.
Based on a general equilibrium model, the university estimated that in 2024 the economy would grow 2.1% in a scenario with the three reforms, compared to a potential GDP of 2.8% in the baseline scenario.
In 2025, growth would be 3.3% with the reforms, compared to a possible GDP of 3.6% in the baseline scenario. by 2030For example, Projected growth with the reforms would be just 2%, compared to 3.4% in the baseline scenario.
“The health and labor reforms limit the growth of the economy, and reduce the generation of employment. The first, because the absence of a risk manager in the system will reduce its efficiency, increasing the resources that the country has to allocate to the health system; and the second, because it raises labor costs”, Eafit indicated.
In relation to the unemploymentthe projection for this year is at a rate of 12.6%, and for 2024 of 13.2% in a scenario with the three reforms, compared to 12.2% in the baseline scenario.
to 2030 the gap would be 3.6 pointswith projections of 11.4% in the base scenario, versus 14% in the assumption of the three joint reforms.
By 2030, the fiscal deficit with reforms would be 4.9%, and without them, 2.4% depending on the institution.
LAURA LUCIA BECERRA ELEJALDE
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