Inflation does not give in, and on the contrary, the rise in the consumer price index (CPI) continues galloping, since in August it registered a monthly variation of 1.02% in Colombia, and its annual figure reached 10.84%. , above market expectations, the highest figure since April 1999, when it was at 11.17%.
(Read: Inflation: foods from the family basket that are ‘through the roof’).
However, for the country’s poorest families, those most sensitive to price increases, inflation is already at 12.7%, and for the vulnerable it is 12.53%. Slightly above national inflation is that experienced by middle-class families (10.98%), and for high-income households, on the contrary, the variation in prices remains in single digits (9.3%) .
Compared to the figures for August 2021, the categories that show the greatest variation in their prices are food and beverages, which have increased their prices by 25.57%restaurants and hotels (15.73%), and household items and their ordinary maintenance (14.75%).
And those that have driven inflation the most, due to their weight in household spending, are food, with a contribution of 4.33 percentage points (pps) to variation; leases and public services (2.19 pps), restaurants and hotels (1.54 pps) and transportation (1.21 pps).
“A good part of the inflation has to do with food, that affects poor and vulnerable households, since they have a greater weight in their basket”, assured Julieth Solano deputy director in charge of the Dane when making official the results of the IPC.
It is worth mentioning that, according to official statistics, in the country there are 19.6 million people classified as poor, 39.3% of the populationand 31% of the population (15.5 million) appear in the vulnerable group.
The official also assured that, to the extent that it has also been seen that the Responsible for inflation are rents and public services“or the increases in the costs of vehicles, this is generating a transmission towards high incomes and the middle class, where this type of goods have a greater participation in spending.”
From Scotiabank Colpatria, on the other hand, Sergio Olarte, the bank’s chief economist, referred to the behavior of food in the August figures and its impact on lower-income families in the coming months.
“This continues to be very worrying, especially since a large part of the basic basket of the low-income population comes from food consumption, which means that there is still a long way to go before inflation reaches its ceiling and surely we are already going to be talking of inflations of more than 11% to November of this year“, said.
The economist said that the depreciation of the Colombian peso has also meant that a large part of the products in the family basket, which have to do with imported items such as cleaning products, supplies for the production of some foods, or appliances, “are also rising from price in a very important way, driving annual inflation”.
(Also: Price of energy has grown 25% in one year).
monthly figures
Regarding the results for the month of August, the Dane announced that during the eighth month of the year there was a price increase of 1.02%, more than double compared to the figure for August 2021 (0.45% ), and 13.11 times higher than the historical average figure for the month, which is 0.08%.
During the month, the largest increases were seen in food and non-alcoholic beverages (1.85%), miscellaneous goods and services (1.54%), restaurants and hotels (1.45%) and furniture and goods for the conservation of the home (1.33%), where the cleaning implements are found. And went, again, food and public services, which boosted the monthly data to a greater extent.
As Solano pointed out, one of the factors that explained the figure, well above market expectations, was the behavior of food, which “broke the downward trend” that it had a few months ago, so it was not foreseen. by analysts.
“In August, food accounted for 34% of total inflation, while during the last twelve months they have contributed about 40% of the increase in the cost of living,” said the Anif economic study center in a commentary. highlighted as the most affected products fresh fruits, onions, eggs and rice.
He also referred to the housing and utilities divisionwhich has been affected so far this year by the Russian invasion of Ukraine “and the disruptions generated in the commodity trade.”
Laura Peña, BBVA Research economist for Colombia, assured that the food division once again surprised strongly on the rise in August, and that within it, processed products take center stage, with an increase of 1.54 points compared to the previous month .
(Keep reading: Control inflation without falling into recession, the Government’s challenge).
“At BBVA Research we expect inflation to remain under pressure for the remainder of the year, (…) which will lead to an upward revision in analysts’ year-end inflation estimates,” he said.
Laura Lucia Becerra Elejalde
