Today the National Administrative Department of Statistics (Dane) will reveal the inflation data for the month of April, a figure that, according to analysts’ forecasts, will continue with the upward trend and could raise the cost of living annual rate of Colombians to 9% in April.
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It is worth remembering that currently annual inflation for March is at 8.53%, after a monthly variation of only 1.0% for this third month of the current year.
Laura Peña, BBVA Research economist for Colombia, told Portfolio an estimate of the Consumer Price Index (CPI) for April of 0.94% monthly and 8.9% for the year to date, mainly motivated by the upward behavior of food prices.
“In April, the pressures will continue to be seen mainly in the division of food and non-alcoholic beverages, which will have an increase of close to 1.9% in the month to month. The calendar effect of Holy Week will lead to increases in the price of meat, products that slowed down in the previous month due to lower cost pressures for producers. Similarly, perishable goods would also show a lower acceleration, in contrast to processed goods, whose inflation would accelerate its pace this month”, said the economist.
On the other hand, Peña also maintains that the restaurant and hotel division It will also register “significant increases” in prices due to two important factors, such as the effect of Easter that “increases the demand for these services” and, in addition, “the second-round effect from the food division, due to which adds slight service pressures, particularly for the city of Bogotá”.
For the economist, other divisions that will register high levels are those of furniture and household itemsagain driven by the increase in the prices of cleaning items.
Under the premise of the increase in food, Carolina Monzón, manager of Economic Research at Itaú Colombia, also agrees.
“We expect a month-on-month CPI of 0.94, again driven by food, but with significant contributions also from restaurants and housing. This would lead to an acceleration of inflation to 8.91%Monzon said.
Based on this, Sergio Olarte, chief economist at Scotiabank Colpatria, also agrees.
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“We expect inflation to continue to climb, especially in annual terms, reaching 9%, due to a significant increase in the price of food that we are still seeing”, mentioned the analyst who also foresees increases in the prices of regulated elements such as electricity and in some indexations due to the higher inflation that has been happening.
“In this way, we hope that in monthly terms it will reach 1%, but we also hope that April will be the month with the highest inflation during the year,” he added.
From the Bancolombia Economic Research Directorate, they expect monthly inflation in April to be 0.85%, with which the 12-month figure would be 8.8%.
“This reading would be the consequence of an acceleration in annual food inflation to 25.9%, a new maximum so far this century, and 12-month inflation for the basic component that would stand at 5.55%”, said Juan Pablo Espinosa, director of Economic, Sectoral and Marketing Research at Bancolombia.
On the other hand, according to the estimate made by the Foundation for Higher Education and Development (Fedesarrollo), the cost of living for Colombians will be located at 8.70%, which reaffirms the trend outside the target range of Banco de la República, which is 2%.
In fact, the analysts consulted by the Issuer for the Monthly Survey of Expectations of Economic Analysts (EME) agree on an average annual inflation of 8.75% for the data for this April.
When will it go down?
In general terms, there is a consensus among the analysts consulted by Portafolio that, in the second half of the year, the upward trend in the annual CPI would begin to slow down. Carolina Monzón, manager of Economic Research at Itaú Colombia, pointed out that this moderation of annual inflation “could occur” in the second quarter “as a result of a high comparison base from a year ago”.
Sergio Olarte, chief economist at Scotiabank Colpatria also considers that annual inflation will begin to moderate after April to gradually approach the target range of the Banco de la República.
“However, for December we continue to believe that inflation could end at 7.2% and nothing else would return to the target range by the second half of next year,” explained Olarte. Laura Peña, an economist at BBVA Research commented that monthly inflation “has already begun to decline” explained by the usual dynamics of a higher inflationary cycle that is recorded in the first months of the year.
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“To which will be added a gradual decrease in external pressures from bottlenecks and international prices of basic goods throughout the year.” At the same time, the economist notes, this gradual reduction will also be reflected in the annual data “which, however, could have a rebound towards the months of June and July as an effect of the comparison bases of the previous year.”
ROBERTO CASAS LUGO
