Annual inflation in August in Colombia was 6.12%

This Friday, Piedad Urdinola, director of the National Administrative Department of Statistics (Dane)revealed the data of the Consumer Price Index (CPI), or inflationin August 2024, shortly after the lifting of the national truckers’ strike.

The official revealed that the inflation data for the seventh month of the year was 6.12% per yearthe same figure presented in July. Similarly, the inflation figure for the current year was 4.33%. As a noteworthy fact, The monthly variation was 0.00%, something that had not happened since July 2020..

(You may be interested in: Details of the inflation data for August 2024 in Colombia).

By variation

The expenditure divisions that showed the greatest monthly variation in August were Restaurants and hotels (0.31%); Accommodation, water, electricity and gas (0.30%); Alcoholic beverages and tobacco (0.22%); Health (0.17%); Transport (0.13%); Clothing and footwear (0.06%) and Goods and services for the home (0.02%).

As for those that had negative monthly variations, they are, in order: Food and non-alcoholic beverages (-0.68%); Information and communication (-0.40%); Recreation and culture (-0.22%); and Education (-0.16 %). The only data that did not show any variation was that of Miscellaneous goods and services.

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As for the annual variation, those that were above the August CPI were Education (10.60%); Restaurants and hotels (8.85%); Accommodation, water, electricity and gas (8.75); Alcoholic beverages and tobacco (7.03%) and Health (6.34%).

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By contribution

Speaking of the monthly contribution, the Dane revealed that the expenditure division that had the highest monthly contribution was Accommodation, water, electricity and gaswith 0.09 percentage points. This is followed by Restaurants and hotels (0.03 pp) and Transportation (0.02 pp).

The divisions that showed negative data were Food and non-alcoholic beverages (-0.13 pp); Information and communications (-0.01 pp); Recreation and culture (-0.01 pp); and Education, with the same data.

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The only ones that had any variation were Alcoholic beverages and tobacco, Health, Clothing and footwear, Household goods and services and Miscellaneous goods and services.

As regards the annual contribution, Accommodation, with 2.65 pp, was the division with the greatest weight. It was followed, in order, by Restaurants and Hotels (0.94 pp); Transport (0.81); Food (0.65 pp) and Education (0.40 pp).

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By geographic domains

Regarding the monthly variation by geographic domains, the director of Dane revealed that the highest data was obtained by the city of Florence (Caqueta), with 0.46%.

The variations that had the greatest weight in this city were presented in the subclasses of Gas (0.22 pp); Electricity (0.14 pp); Dried fruits (0.12 pp); Imputed rent (0.04 pp) and Cash Lease (0.03 pp).

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Florence is followed by Bucaramanga (0.26%); Valledupar (0.25%); Cúcuta (0.25%); Cartagena de Indias (0.25%); Pereira (0.24%); Manizales (0.22%); Popayan (0.21%); Sincelejo (0.19%); Cali (0.02%) and Bogota (0.02%).

As for the negative data, Tunja was the city with the highest figure, with -0.60%. This is followed by Santa Marta (0.54%); Villavicencio (-0.38%); Medellin (-0.27%); Neiva (-0.09%); Ibague (-0.08%); Barranquilla (0.06%); Grass (0.05%); Armenia (-0.04%) and Hunting (-0.03%). Riohacha was the only city that showed data similar to the national one.

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Looking at the capital of Boyacá, it was found that the subclasses with the greatest weight were Fresh fruits (0.13 pp); Gas (0.07 pp); Meals in establishments and self-service (0.06 pp); Chocolate (0.03 pp) and Nurseries (0.01 pp).

As for the annual variation of the CPI, Valledupar was the geographic domain with the highest data, with 7.36%. These are followed by Sincelejo (6.88%); Riohacha (6.86%); Bucaramanga (6.83%); Cúcuta (6.76%); Cartagena de Indias (6.62%); Pereira (6.48%); Florence (6.47%); Montería (6.48%); Bogotá (6.42%); Barranquilla (6.27%) and Armenia (6.26%).
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The data that, however, were below the national annual variation were Villavicencio (4.40%); Neiva (4.66%); Ibagué (4.97%); Popayán (5.10%); Cali (5.14%); Santa Marta (5.27%); Tunja (5.45%); Pasto (5.61%); Manizales (5.62%) and Medellín (6.08%).

By income levels

Regarding the monthly variation according to the level of household income, it was found that The highest variable figure was for the high-income household group, with 0.08%This is followed by the middle class (-0.01%), the poor (-0.06%) and the vulnerable (-0.07%).

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As for the current year, it was observed that The highest variation was also found in high-income households, with 4.46%. This is followed by the middle class (4.30%), vulnerable (4.24%) and poor (4.22%).

Finally, in the annual variation, it was found that, again, The highest variation was seen in high-income households, with 6.15%This figure is followed by those obtained by middle-class households (6.12%), vulnerable (6.08%) and poor (6.01%).

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Data calls for more aggressive rate cuts

After the inflation data was known, the President Gustavo Petro He stressed that the CPI in August was zero, ensuring that it is time to make a more aggressive reduction in monetary policy interest rates.

“Some people are not expecting it. Inflation in August was 0%. ZERO. There is no longer any excuse for not lowering the interest rate and reactivating the economy.“, the head of state assured on the social network X.

What the president said, in fact, is in line with what was said by the Minister of Finance and Public Credit, Ricardo Bonillawho reaffirmed that the portfolio maintains its projection of inflation of 5.5% for the end of the year and a reduction of 75 points is expected in the next meetings of the Board of Directors of the Bank of the Republic.

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“We have been controlling inflation for 17 months. (…) We have reduced it by 722 points since the highest point, which was in March 2023. This means that the call to the Bank of the Republic is that it is time to accelerate the reduction of the intervention rate.“, Bonilla said.

Jackeline Piraján, economist at Scotiabank Colpatriasaid that the inflation data confirms a reduction in prices in the country, even with what happened with the transporters’ strike.

“(…) it seems that prices in Colombia are normalizing, although during the month of September there were impacts on the prices of perishable foods due to the strike, it is possible that due to the short duration, this effect of increasing prices may be reversed in what remains of the month and allow inflation to continue falling.“, said the expert.

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