The phenomenon of rising prices has been felt in the pockets of Colombians and in the costs of many industries, and although inflation in November registered an annual variation of 5.26%, some sectors such as information and communication; clothing and footwear have driven prices down during the year, and therefore, they have counterbalanced the increase in inflation.
The first of these is the one that has had the strongest downside effect. The information and communications line recorded, in the latest Dane report, an annual variation of -11.75%, which contributed -0.49 percentage points (pps) to total inflation. While so far this year, to November, the variation of this group has been -12.09%, with a negative contribution of 0.51 points.
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According to the director of Dane, Juan Daniel Oviedo, the explanation in the price reduction “In the information and communications component, not only have there been days without VAT, but also greater competition in the Internet and voice services market, especially mobile, where there has been a reduction in implicit rates for allowing users to plan higher capacity while preserving the monthly rate”.
Faced with this, Samuel Hoyos, president of Asomóvil, an association that brings together mobile phone operators, highlighted how during the pandemic the sector has been key by being responsible for offering communication services both for people as for many commercial and industrial sectors.
“Today, all plans are unlimited in voice, connectivity packages are also increasingly beneficial to users, which implies an important advance compared to what happened in years ago when only a limited number of minutes or call only certain users. In that sense, prices have definitely dropped.”Said Hoyos, who reiterated, however, that 80% of users continue to use prepaid plans, so they do not access these services.
The representative of the telephone operators assured that in recent months there has been a growth of more than 8 million fixed and broadband connections, which surely has an impact and it is reflected in the prices in relation to the capacity of the service.
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“Beyond the prices, the operators today are offering much greater capacity and speed to the user without increasing the cost of their invoice. In addition, as a result of the pandemic, network traffic increased by 40%“Said the president of Asomóvil.
Another element referred to by the director of the Dane and that affects the prices of telephony and Internet plans is the greater competition in operators, which has therefore reduced the prices that consumers receive in this category.
Within the subdivisions that the Dane measures within the sector, prices in ‘Telephone and fax equipment’ registered a reduction of -7.93% in November in relation to November 2020, and so far this year a negative inflation of 13.12%. Regarding the ‘telephone and facsimile services’, both inflation in the first 11 months of 2021, and in relation to that of November of last year, was -12.01%.
CLOTHING AND FOOTWEAR
The other sector that has had a predominantly downward behavior this year is clothing and footwear. Although in November the annual inflation of the category was positive, and there was an increase in prices of 0.68%, the year-to-date variation of the item is -2.2%, and, as Oviedo explained, in the latest publication of the inflation bulletin, this is a consequence of the two days without VAT that accumulate in October and November.
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“In November we had a monthly variation very in line with what we had been observing in October compared to clothing and footwear for the day without VAT, with a monthly variation of -0.63%”, Indicated the director of Dane, in the last presentation of the Consumer Price Index (CPI).
Clothes, of what most were bought in the days without VAT.
Among both elements that are part of the division, clothing is the one that has had the most effects of falls in prices, with an annual inflation of -0.19% according to the data registered in November, and of -3.86% between January and November, or in the current year. On the contrary, footwear has seen an increase in prices: with an annual inflation in November of 3.49% and a figure of 3.33% during 2021.
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Despite the effect on prices, which the promotions of recent months have had, from the Colombian Chamber of Clothing and Related Products, its president Camilo Rodríguez mentioned that, although they have actually been increasing real production and sales, “Unfortunately, the number of jobs has not been recovering in the same way. The sector has been facing increases in both maritime and logistics costs, so the imported product has begun to give space to the national product that is producing more”.
Rodríguez stressed that although On the day without VAT, the clothing sector had an important predominance, raw materials have increased in value, and logistics costs, and therefore producer prices.
Likewise, and although these sectors are the ones that have had data of reduction in prices, in the last month, according to Oviedo explained, another sector that showed negative price dynamics was recreation and culture (-0.5%), so that “tourist package from January 15 and for February 2022 they are already presenting reductions”.
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LAURA LUCÍA BECERRA ELEJALDE
Portfolio Journalist
Twitter: @LauraB_Elejalde
