Inflation in Colombia: analysts see possible rebounds in the remainder of 2024

The brake that inflation registered in May and the slight increase it presented in June caused the economic analysts that the Bank of the Republic consults monthly to consider that this indicator could rise at the end of 2024 and 2025.

(More: What will Colombia’s inflation be like in 10 years, according to artificial intelligence?).

According to the Monthly Survey of Economic Expectations (EME) that the Colombian central bank applied between July 9 and 11 to 29 analysts, Inflation is estimated to end this year at 5.77%, when the survey applied in June projected that the figure could reach 5.72%.

The EME consults economic analysts on their expectations of inflation, the intervention rate of the Bank of the Republic, the representative market rate (TRM) and growth of the gross domestic product (GDP), for certain time horizons and is one of the inputs used by economic study and analysis centers, as well as by investors and even the Government.

(Read: Rate war: Is it a threat to inflation?).

Furthermore, the survey is part of a set of tools for the analysis of monetary policy transmission channels, which allows studying the degree of anchoring of inflation expectations, with the particularity that the EME allows collecting direct information on expectations.

From elsewhere, Analysts also increased their inflation projection for 2025, for which they said it could close at 3.94%, compared to the 3.89% they had seen in the EME in June.

In both cases, the figures are only slightly below the ceiling of the range, between 2% and 4%, with a central target of 3%, which is the long-term goal of the Bank of the Republic in its inflation projection.

(See: For the second consecutive month, monthly inflation in Argentina closes below 5%).

Among the results delivered by the issuer is that it also increased the projection for the end of this year in regards to the interest rate.

In the survey conducted among analysts at the beginning of July, they considered that the monetary policy rate of the Bank of the Republic will be lowered by 50 basis points, from the current 11.25% to 10.75%.

(More: Only 8% of Colombians feel they live comfortably).

For their part, those surveyed said that at the end of 2024, this rate would end at 8.76%, a figure higher than the 8.63% projected in June.

In the case of the 2025 closing, The central bank intervention indicator is projected to end at 5.87%higher than expected in the previous survey when it was estimated at 5.78%.

Holman Rodriguez Martinez
BRIEFCASE