2023 will be the year of economic uncertainty after the high inflation figures that the country registered in 2022. According to Dane, the annual CPI was 13.12%, one of the highest figures in the history of Colombia.
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Throughout the past year, the Central Bank has opted for a sharp rise in interest rates to try to curb inflation. The Bank of the Republic raised the reference rate to 12% at its December meeting, which represents an increase of 10.25 percentage points since the increase cycle began in 2021.
These increases would not begin to slow down, according to experts. BNP Paribas forecasts for Latin America, according to Felipe Klein, the entity’s economist, indicate that the next meeting ofThe Bank will announce a 75 bp hike on January 27 that could be as high as 100 bp.
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“Although we believe that the BanRep will rise 100bp as inflation expectations continue to rise, we believe that part of the Board will try to take advantage of the global climate of the slowdown in rate hikes by the main central banksKlin explains.
Along with this, they consider that the behavior prior to the meeting will end up being fundamental, even more so after the statements of Irene Vélez, Minister of Mines and Energy, on not signing more oil and gas exploration contracts.
By the end of 2023 they expect the rates are at 12% and by the end of 2024 at 7%. However, they consider that in March of this year, the increases would reach a peak of 13.25%.
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About inflation, Klein mentions that the annual variation for 2023 will be 8% and in 2024 4%.
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