Inflation in Colombia officially began to show signs of slowing down. According to the most recent Dane report, in April the monthly CPI was located at 0.78%, a figure that is below the forecasts of analysts and the Banco de la República who were thinking that it would reach 0.90%.
(Inflation began to subside: annual variation in April was 12.82%).
According to Sergio Olarte, chief economist at Scotiabank Colpatria, this caused annual inflation to drop from 13% (12.82%) in its annual variation.
For the analyst, food for the first time since June 2021 had a slightly negative variation of 0.07% and that brought annual food inflation down to less than 19%. Although the figure is still very high, it is a great advance since last year it reached almost 28%, that is, it has dropped almost 10 percentage points.
(This is how Petro reacted to the drop in inflation in Colombia).
Additionally, Regulated ones such as electricity, gas, and water also began to slow down slightly.
“The news that is not so good yet is that those rents that we pay on account of price indexation have not been able to drop yet, however they are also stabilizing. In general, the inflation data for April shows a positive sign towards the beginning of the slowdown in inflation and from now on we see that this indicator will gradually slow down to reach around 9% at the end of the year”Olarte added.
(Relive the presentation of the April 2023 inflation report.)
Finally, the analyst points out that with this figure, the Banco de la República would stop raising the interest rate at its June meeting, leaving it stable at 13.25% for as many months as possible while inflation begins to have single digits. This would occur around October and then the Banco de la República will surely be able to start lowering the interest rate.
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