A recession is understood as a significant and prolonged decline in economic activity, visible in income, employment, industrial production and the level of commercial activity. Although with some detractors, an economy is usually defined as being in recession when its Gross Domestic Product (GDP) decreases, year after year, for two consecutive quarters.
This is exactly what has just happened with the economy of the department of Antioquia.
According to the Quarterly Indicator of Departmental Economic Activity (ITAED) published on May 30 by the National Administrative Department of Statistics (DANE), the growth rate of the Antioquia economy for the fourth quarter of 2023 was negative, -0.4 %. This result, added to the 1.6% decrease seen during the third quarter of the previous year, would indicate that Antioquia has entered a recession.
A result that worsens when compared with the rest of the country: although the slowdown of the Colombian economy has become evident with the latest DANE data, the performance of the economies of Cundinamarca, Valle del Cauca, Atlántico, Bogotá and Santander registered figures, although close to zero, in positive territory during the last quarter of 2023. According to the same figures, Antioquia barely achieved 0.2% growth in 2023, but when broken down by segments, significant concerns arise.
On the one hand, if we exclude the segments associated with public administration expenses and taxes, the Antioquia economy decreased in real terms. Furthermore, the greatest contraction was observed in the construction and manufacturing sectors, which saw drops of 8% and 7% respectively, a trend that, particularly for housing construction, could worsen in 2024 and 2025 due to the drop in sales associated with higher interest rates and problems in the allocation of government subsidies such as “Mi Casa Ya”. We have not yet seen the full effect of the drop in sales this last long year reflected in the sector’s numbers, which may manifest between 12 and 24 months later.
The segment of the Antioquia economy that is growing the most is financial and insurance activities, followed by artistic, entertainment and recreational activities, with a growth of 9% and 7% respectively. However, in the case of entertainment, the news is not so positive: the sector went from growing more than 30% in 2021 and more than 40% in 2022 to growing in single digits in 2023. Although there are indications of the great potential of Medellín in this sector still represents less than 4% of the department’s economy.
In contrast, sectors such as commerce, which with 19% are the ones that weigh the most in Antioquia’s economy, exhibited a contraction in real terms.
All this trail of figures makes one message clear: Antioquia urgently needs shock measures for economic reactivation. The public and private sectors of Medellín and Antioquia, now in dialogue again after last year’s regional elections, must work hand in hand. This is not the time to point fingers or look for blame.
The department cannot afford to waste more time without economic growth, since this is the only sustainable way to address, in the medium and long term, the challenges of multidimensional poverty, hunger, education and population aging that it faces. the region.
