Reactions to the inflation data of 6.86% for the month of July: Minhacienda issued a statement

The National Administrative Department of Statistics (DANE) announced the data of the inflation of the month of July 2024, which resumed its downward trend and stood at 6.86% annually.

(Further: Colombian inflation falls again in July thanks to housing division).

The seventh month of the year closed with an annual inflation rate of 6.86%, while compared to June, it showed a variation of 0.20% and for the year to date, the figure was 4.32%.

The Accommodation, water, electricity, gas and other fuels division recorded the largest monthly variation with 0.45%with increases in gas prices (1.76%) and water supply (1.35%) standing out. On the other hand, electricity experienced a price decrease of -0.58%. In the Alcoholic Beverages and Tobacco division, an increase of 0.33% was observed, with cigarettes and tobacco being the products with the highest increase (0.63%).

As regards the annual variation of the CPI, the Education divisions, with an increase of 11.20%, and Restaurants and hotels, with 9.07%, were the ones that contributed most to this annual increase.

(Read: Brazil’s central bank does not rule out raising interest rates if inflation worsens).

In response to this, officials from the National Government and business leaders reacted to this new data released this Friday by the DANE.

Reactions to the July inflation data

One of the first to speak out was the Minister of Finance and Public Credit, Ricardo Bonilla, who called on banking entities, Among which he highlighted the Bank of the Republic, continue to lower interest rates.

“We have dropped 648 points from the threshold in March 2023 and today we have a real rate of 389 points, therefore, the call to the country and to the banks is that we must continue to lower interest rates. Inflation is being controlled. The call to the Bank of the Republic is that with a real rate of 389 we can continue to lower the intervention rate and we hope that at the next meeting we will arrive with a 75-point reduction.“, the head of the portfolio emphasized.

(See: Venezuela: Inflation rises to 4% in July, 1.6% more than in June).

For its part, Alexander López Maya, director of the National Planning Departmentagreed that the data allows for greater speed in the reduction of rates by the Issuer.

“This reduction in July was less than those projected by the financial sector and sends a good message to the country about the good performance of the economy. We hope that the Bank of the Republic, in line with the reduction in inflation, will reduce the fixed interest rate, which is at 10.75%, in a much more ambitious way in order to further boost the reactivation of the economy.”Lopez said, through his X account.

He thinks the same way the president of the Colombian American Chamber of Commerce (AmCham Colombia), María Claudia Lacouturewho also agrees on the possibility that the Bank of the Republic may consider further reductions in interest rates, with the aim of boosting consumption and supporting sustained growth.

“The consecutive reduction in inflation in Colombia is encouraging news for the country’s finances and the well-being of its citizens. This decline not only relieves the pockets of Colombians, but also offers a key opportunity to boost economic recovery. It is essential that we continue to adopt measures that maintain this downward trend, while strengthening the economy.“, Lacouture said.

(Further: Colombia is the second country with the highest inflation in the OECD).

Finally, the director of the Department of Social Prosperity (DPS), Gustavo Bolívarwho is also one of the officials closest to President Gustavo Petro, said that this data is worth highlighting considering the current situation of the global economy.

“Petro, which was supposed to destroy Colombia, is defeating inflation: It is now at 6.8%, despite the global recession”“, Bolívar expressed through X.

PORTFOLIO