The issuer warns about new inflationary risks and maintains its cautious posture in monetary policy.
Economists in Antioquia assure that the decline that inflation in the country will serve for the Bank of the Republic to accelerate the decision to reduce the interest rate.
The Bank of the Republic adjusted its inflation projection for this year from 4.4 % to 4.7 %, By warning persistent pressures in prices and an economic context with upward risks. Although inflation has yielded slightly, The issuer expects that only in 2027 the 3 %goal will be reached.
During the most recent update of its monetary policy report, the Bank of the Republic reported that the technical team increased its inflation projection by 2025, from 4.4 % to 4.7 %, due to higher production costs, including labor costs, already surprises in international prices.
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“Inflation would resume its bass player in 2026 and would only reach the goal of 3 % in mid -2027”Said the issuer.
The report details that consumer basket prices increased more than anticipated during the second quarter of the year. Although in June inflation was slightly reduced to 4.8 %, after having remained stable at 5.1 % the previous months, this decrease was lower than expected three months ago.
Among the factors that have helped moderate the rise in prices are The recent reduction in electric power rates, a lower price of the dollar and a greater food supply.
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However, the issuer warns that “Risks persist that could slow down the reduction of inflation, including substantial increases in labor costs, strong increases in gas rates and the future evolution of the exchange rate, in an environment of deterioration of public finances in the country and high international uncertainty. ”
Monetary policy
The Bank Board of Directors decided to maintain the monetary policy interest rate by 9.25 % both in June and July. Although it is recognized that inflation has been reduced, this fall is expected to occur at a slower pace in advance, with relevant inflationary risks forward.
“It is considered that a cautious monetary policy is appropriate for inflation to continue and reach 3 % in the next two years,” says the report.
The bank also reiterated that its current position is compatible both with the convergence of inflation to the 3 % goal and with the dynamism of the economy.
Consumption
The report highlights a gradual recovery of economic growth. In the first quarter of 2025, the economy grew 2.7 %, a figure higher than expected (2.5 %)mainly driven by household consumption.
“The good performance of household consumption occurs in a context marked by a high flow of remittances, greater income from coffee activity, a reduction in financial burden and a significant increase in the minimum wage,” said the issuer.
This impulse was also reflected in a significant increase in imports. On the other hand, growth was partially compensated by the low dynamism of investment in construction and the fall of mining and oil activity.
Employment has also shown signs of improvement, especially in rural areas and work on its own. According to the bank, The unemployment rate continues at historically low levels.
In the future, the issuer projects greater economic dynamism promoted by high prices of some export products, the gradual recovery of credit, good tourism behavior and a lower affectation due to global commercial and geopolitical conflicts.
Source: Integrated information system
