Inflation without food, at 6.5% due to rents and restaurants

In recent months, inflation has been driven especially by the rise in food prices, group that it began to show a slowdown in its growth in the May figures.

(Low in the CPI would be temporary and inflation would pick up in June).

But not only these have been presenting significant increases. Although the general variation of the Consumer Price Index (CPI), released over the weekend, was 9.07%, annual inflation without food, on the other hand, is at 6.5%.

After food, which in May contributed 3.67 percentage points (pps) to total inflation and registered an annual variation for the CPI of 21.6%, the category of accommodation, water, electricity, gas and other fuels, which includes rents and public services, is the other that has most driven the rise in prices. In May, the contribution of this group was 1.75 pps to the variation, despite the fact that its inflation stood at 5.36%.

(Potato prices fell 40% during the month of May).

Another group that is also contributing significantly to inflation is that of restaurants and hotels, with a contribution of 1.42 pps, and annual inflation at 14.73%, the second highest after food. Goods and services related to transportation (0.97 pps), goods and services for the home and its maintenance (0.49 pps); the contribution of the category of miscellaneous goods and services is 0.43 pps, that of recreation and culture 0.16 pps, and is followed by education (0.12 pps), health (0.12 pps), alcoholic beverages and tobacco ( 0.12 pps) and clothing and footwear (0.10 pps).

The only group in the basic basket of households that is subtracting points from inflation is information and communications. In May, it subtracted -0.27 pps from the total variation in inflation and is also the only category with negative inflation, since prices are -7.11% below those of a year ago.

“The other items in the family basket that are not food continue to rise. Inflation without food is already at 6.5%, the highest since 2003, a large part due to regulated items, a good part due to rents, which weigh a little more than 20% of the family basket. It seems that it will continue that way in the remainder of the year, it is possible that inflation will drop a little, but it will continue to be well above the expectations of the Banco de la República”, said Sergio Olarte, chief economist at Scotiabank Colpatria.

The director of Dane, Juan Daniel Oviedo, assured in the presentation of the IPC bulletin that “leases account for approximately a quarter of household spending”, and assured that “we are seeing leases, especially of houses, with indexes by above the annual inflation of last year, which was 5.62%, and close to 7%, which shows that leases are generating significant pressure on the behavior of inflation”.

Oviedo also highlighted that public services and electricity are the elements that have been putting the most pressure on prices in recent months. And according to the entity, the CPI for energy (gas and energy for home consumption and fuel for vehicles) is at 12.1%. In fact, according to Dane, annual inflation, without energy or food, would be 5.98%.

GOODS AND SERVICES

By products, some of those that registered the greatest increase in their prices compared to those of a year ago are vehicle insurance, which registered an increase of 24.53% in the last 12 months; cleaning products, with an increase of 23.05%, and also materials for home repair, with a variation of 18.79% between May 2021 and May 2022.

Likewise, the stationery shop articles, that include implements such as notebooks, agendas, loose paper and reams have seen an increase of 18.08% in their prices in the last year.

In addition, bicycle parts, such as rims, tires, rims, chains, sprockets, or lights, are among the product categories with the highest price increases, an inflation of 17.53%. In the case of tires and rims for vehicles, the increase in value is 17.48%, in electricity it reached 17.31% in May and in lighting equipment at 17.10%. Motorcycles and bicycles have increased their prices by 15.97% and toiletries by 15.73%.

LAURA LUCIA BECERRA ELEJALDE
BRIEFCASE