The latest inflation data in the country contradicted the expectations of market analysts and the Minister of Finance himself, José Antonio Ocampowho expected it to begin to decrease.
(Read: Government measures to curb inflation that does not stop rising).
As revealed by the National Administrative Department of Statistics (Dane), in March the variation of the Consumer Price Index (CPI) reached 13.34 percentslightly higher than the 13.28 of last February, but almost nine times more than that registered in March 2021 (1.51 percent).
“Although inflation continued to rise, these increases are becoming smaller and, when looking at the different elements and items of inflation, a slowdown is already beginning to be seen, which is good news.“, assured Sergio Olarte, chief economist at Scotiabank Colpatria.
Regarding March, inflation was 1.05 percent, while in the three months to 2023 prices have increased 4.56 percent.
What contributed the most to annual inflation
One of the big increases was in the prices of food and soft drinks; although its annual inflation was 21.81 percent, it is less than the 24.14 percent in February.
Nevertheless, was the group that contributed the most to the CPI variation, with a contribution of 4.05 percentage points. The ones that increased the most in price were arracacha, yams and other tubers (102.31 percent), onions (52.86 percent) and plantains (45.79 percent). On the contrary, what fell the most were potatoes (-12.88 percent) and tomatoes (-11.17 percent).
(Also: World food prices have continued to fall, but are still high.)
However, the second thing that contributed the most were the accommodation services, water, electricity, gas and fuel, with 2.43 percentage points. It should be noted that among the 15 expenses (out of 188) that weigh the most on the family basket in the last 12 months, there are five services that are regulated by the national government and that add 2.2 percentage points to annual inflation.
In principle, there is electricity, 0.6 percent, that despite the efforts made by the companies to lower the prices of electrical energy, the service is once again having increases and in March marked an annual inflation rate of 19.77 percent; Meanwhile, in February it was at 19.51 percent.
The same contribution has urban transportation, 0.6 percent, which each beginning of the year increases its rates in the different cities of the country. There are also fuels for vehicles, 0.5 percent, such as gasoline, which in the last seven months has risen 1,989 pesos, on average.
The The last two services that are contributing the most are gas (0.3 percent)which in February had become 22.12 percent more expensive and a month later the rise was greater, 27.39 percent, while the water supply (0.2 percent) already registers inflation of 10.91 percent. hundred.
(Read: What is the agreement between Latino governments against inflation).
“Many companies have stopped and others are having problems due to the cost of inputs and the high cost of energy and fuels that are inevitably passed on to the final consumer. To this must be added the uncertainty of the reforms that are going through Congress, especially the labor reform that, as it is proposed, could mean new costs and more productive difficulties and more inflation.“, assured the president of the Colombian American Chamber of Commerce (AmCham Colombia), María Claudia Lacouture.
What’s Next for Inflation
BBVA Research forecasts that inflation will remain at high levels for a few more months and will begin to decline moderately in the second half of this year. So, reiterates its inflation expectation for the end of 2023 at 9 percent and for 2024 at 5 percent.
It is the same percentage that Scotiabank Colpatria estimates and that is enough for the Banco de la República in its April meeting to decide to maintain interest rates at 13 percent for most of the year. He doesn’t expect them to drop because the slowdown in inflation is going to be slow.
(Also: IMF predicts five difficult years for the global economy).
Although Bancolombia’s Economic Research team also expects inflation of 9 percent, it does believe that there is still room for the Issuer’s board to make a new and final rate increase of 25 basis points at its meeting this month.
LINA QUIROGA BLONDE
Economy and business- EL TIEMPO
