Inflation could affect levels of food insecurity in Colombia

One of the recent victories of the monetary authorities in Colombia is the sustained decline in inflation, an indicator that, although expected to rebound after the pandemic, reached levels that exceeded expectations and It put the country’s economy in a scenario in which it is still on the ropes.

Currently, the Consumer Price Index (CPI), fundamental for measuring the cost of living, is at 7.16% (April cut) and the study centers aim for it to close the year above 5% if nothing changes and that for 2025 reaches the target range, which currently stands at 3%, to consider this inflationary crisis completely overcome.

In this it is worth mentioning that we should not take our eyes off the behavior of the prices of agricultural and mining products, since although the downward trend continues, the reductions in these lines are increasingly smaller, which indicates that there are strong upward pressures.

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Phenomena such as the El Niño phenomenon, which has already ended, or the La Niña phenomenon, which could arrive with heavy rains until the end of this year, are two phenomena that experts must be wary of, since a spike in inflation again would affect one of the points considered a priority by this Government: food insecurity.

This week an analysis by BBVA Research was published in which it is noted that taking care of the quality of food and access to this service by Colombians is directly linked to purchasing power and the influence exerted by the cost of living, month by month. month, since the higher it is, the less you can buy.

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For Laura Katherine Peña, an economist on this team, she stated that although things are progressing in the best way, we must not let our guard down and we must pay special attention to the fact that in a country with an agricultural vocation, Food insecurity hits one in four households.

“The results of the study on food security in Colombia were recently published, and there has been a significant decrease in the percentage of households with moderate or severe food insecurity, from 28.1% in 2022 to 26.1% in 2023. But “Why does food insecurity affect one in four households in a country with an agricultural vocation? Will there be improvements in 2024?” said Peña.

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This analyst starts by remembering that in 2023, Colombia imported close to 11.8% of its agricultural consumption and exported about 12.3% of this, a situation that for her suggests that the country has the capacity to produce enough to feed Colombians and that despite this, access is limited, mainly due to the increase in product prices and adjusted income.

“The measurement of monetary poverty carried out by DANE accounts for these limitations, estimating that 36 out of every 100 Colombians would not have enough money to acquire a minimum basket of food and services to live. Therefore, monetary poverty is necessarily linked to the increase in prices,” he said.

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Laura Peña added that in recent years food inflation was at its highest levels in this century (27.8% in December 2022), even exceeding total inflation (13.1% on the same date). As a consequence of this, she explains that price increases mean that consumers can put fewer products on their table with the same amount of money, leading to high food insecurity.

“Although total inflation, and particularly food inflation, has decreased substantially in 2024, this does not mean that the prices of the products have also increased: the price of 1kg of rice rose from $1,500 in 2019 to $2,560 in 2024 according to DANE, on par with inflation, but lower inflation will not lead to cost less, only to have its price increase more slowly. That is, we continue with high prices,” he said.

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In this way, it concludes that the expectation of a deterioration in unemployment is added to the constrained budget of households, and the fact that rents and public services can maintain a high rate of increases in 2024, which means that households will have to strive to cover shelter and food.

“Thus, these conditions reduce the possibilities of great improvements in the food security indicator, at least in 2024,” he closed by saying.