translated from Spanish: Central bank said a “state of hibernation” could cause an economic decline of more than 25% per month

In connection with the proposal proposed by Public Space to enter a “state of hibernation” to contain the contagions of Covid-19, the President of The Central Bank, Mario Marcel, referred to this idea which could cause a fall in the economy. At a think-of-the-June Monetary Report, the helmsman stated that hibernation “we understand that it is not within the decisions communicated by the health authority today, but in any case, at least because of the original description of this, one might assume that it involves a halt to many more activities”””If we take into account that the growth estimates that the Bank made in the March IPoM meant that that for each month in which quarantines and other restrictive rules were maintained that were in place in early April, i.e. selective quarantines, class suspension, and some other restrictions on mobility, that meant a product loss of between 12 and 15%,” he said. In addition, Marcel said that at present “we can estimate that the type of quarantines we have today, with considerably wider coverage that exceeds 40% of the country’s population, which affects more economic activities, which includes more restrictions on mobility, we can estimate that with that the loss that occurs during a full month of validity of those restrictions is between 20 and 25%”. He also stated that “if by hibernation we understood even stricter restrictions than these that I am describing and that are currently in application, we would have to assume activity drops greater than that 25%.” In these circumstances, of course, other issues arise that are not typical of economic calculation: logistical issues, population supply, etc., which I imagine will be what the authorities will consider when evaluating such proposals,” the economist said.

Original source in Spanish