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The National Administrative Department of Statistics of Colombia (DANE) announced that last month the cost of living for citizens increased by 0.93% compared to September 2021. The inflation rate stood at 11.44%, a figure that is not it had been seen since 1999. Before the announcement, the Bank of the Republic reported an increase in interest rates to cool down the economy, a decision that President Gustavo Petro opposed.
Colombia continues to occupy the first positions in the Latin American countries that have registered a high year-on-year interest rate so far in 2022.
With the historical figure, the Colombian administrative department showed in its report that the greatest price variations were registered in goods and services for the home, among which are appliances such as refrigerators, ovens, washers and dryers; food and non-alcoholic beverages was the second group to suffer the highest price increases.
“The monthly behavior of the total CPI in September 2022 was mainly explained by the monthly variation of the Food and non-alcoholic beverages and Accommodation, water, electricity, gas and other fuels divisions. The greatest variations were presented in the divisions Furniture, articles for the home and for the ordinary maintenance of the home (1.65%) and Food and non-alcoholic beverages (1.61%)” reads in the entity’s report.
With the announcement, the Bank of the Republic of Colombia proposed an increase in interest rates to discourage spending by Colombians and “help control inflationary pressures.” A decision that has been very common in the central banks of several countries in the world that seek to reduce the debt capacity and purchasing power of their citizens.
Discourage spending by raising interest rates @bancorepublica will help control inflationary pressures. And, although the growth of the economy will be lower in 2023, moderate inflation will allow a sustained growth rate in the future. pic.twitter.com/Kw2T5gVOCN
– Republic Bank ?? (@BancoRepublica) October 5, 2022
However, for President Gustavo Petro, the increase in interest rates will cause “the world recession to be transferred to the Colombian economy” and that it goes “against the economic growth and employment of Colombians.”
According to the president, the announcement by the issuing entity of Colombia goes in the opposite direction of his government proposal and that from now on his administration plans to deepen its anti-inflationary policy.
The rise in the internal interest rate, which was opposed by the finance minister, but had the support of the entire board of directors of Banco de la República, will only transfer the world recession to the Colombian economy.
– Gustavo Petro (@petrogustavo) October 5, 2022
With EFE and local media.
