There are expectations of moderation in annual inflation in March

This April 3, the Dane will present the inflation data for March and, although there are divided opinions, Much of the market expects the annual indicator of the Consumer Price Index (CPI) to show signs of a slowdownwhich could even imply that inflation has already peaked.

(Read: Colombia does not rule out a new rise in interest rates).

The monthly survey of expectations carried out by the Banco de la República projects a variation monthly average of 0.99% in March prices, with a minimum of 0.78% and a maximum of 1.4%.

On the other hand, the Fedesarrollo Financial Opinion Survey (EOF) projects that the annual variation of the indicator will see a spikeand will drop from the 13.28% registered in February to 13.24%. Said survey locates a range between 13.16% and 13.32% for the indicator.

Banco de Bogotá, for example, a monthly variation of 0.94% is expected, with which inflation would drop in annual terms to 13.21%. “This expectation is close to the analysts’ consensus, so it is quite probable that if it is fulfilled we will have the inflation peak reached this first quarter,” said Camilo Pérez, the entity’s director of economic research.

However, he warned that core inflation, which excludes food, will surely continue to rise for several months.

(See: After 3 months, factory orders, production and employment rose).

Forecasts like Itaú’s, on the other hand, they expect a figure of 0.99% for the month, which would entail a marginal increase in the annual figure (13.29%). In this way, the ceiling would have arrived with the March data.

“We expect the greatest contribution to come from the price of food and transportation, given that despite the fact that we expect a slowdown in the price of food, its contribution will continue to be important, together with the rise in the price of gasoline and the increase that have suffered some air tickets after the crisis of some airliness”, mentioned Juan David Robayo, senior economic analyst at Itaú Colombia.

Other projections are somewhat less optimistic, such as Scotiabank Colpatria, which expects inflation for March of 1.02% monthly and 13.31% annualand according to Sergio Olarte, the entity’s chief economist, March is expected to present the highest figure of the year, but considering that it is already at the peak.

“In fact, since December there have been marginal increases and a very gradual slowdown in inflation is expected mainly due to a decrease in food inflation. For this reason, by the end of 2023 we project inflation of 9.3%“, said.

(Keep reading: Low interest rates and inflation would raise dividend optimism).

For BBVA Research, the monthly forecast for March is 1.14% and the annual forecast is 13.44%. Laura Peña, the bank’s economist, explained that the inflation in March will be largely explained by “a certain continuity in pressures from regulated items and goods.” In the former, fuel and transportation prices will contribute to the increase, along with education, due to increases in enrollment prices.

“Within the basket of goods, those associated with cleaning products will continue unmoderated. Finally, the food basket will maintain high monthly inflation, despite the fact that in annual terms the high base effect of comparison with respect to 2022 will allow it to continue fallingPena said.

LAURA LUCIA BECERRA ELEJALDE
Portfolio Journalist