Financial markets and health crisis
On April 16, 2020, in the midst of the health crisis, we invited former Minister of Finance and director of Frontal Trust, Rodrigo Valdés, to a remote discussion with our clients and investors, to help us answer, in seven questions, the concerns that the financial market was having while facing the health crisis.
The meeting, which was attended by more than 140 people via zoom webinar, began with a brief intervention by our Chairman, Andrés Echeverría, who spoke about the impact of the pandemic on our lives; the behavior of the markets since the first contagion case was known in Wuhan, China; and the way in which the markets where we invest have responded, mainly real estate and financial sectors.
For his part, Valdés addressed the challenges posed by Covid-19 pandemic for economic recovery. He warned that we are facing an external shock never seen before in modern times and that, unfortunately, our economy is facing serious liquidity restrictions and there are not enough private savings to face the adverse effects of this pandemic.
He pointed out that in his opinion, public policies designed by the government seemed right, but they had been applied late, so there were very negative effects on employment, fundamentally those associated with small and medium-size companies.
Regarding fiscal spending, the former Minister of Finance indicated that the gaps available have been used to support the measures promoted by the government. However, he pointed out that going forward we will face a situation of increasing indebtedness, since we still do not know with certainty when the pandemic will be controlled and how we will address fiscal debt commitments.