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In May, monthly inflation was 0.84% and annual inflation was 9.07%, close to the expectations of market analysts and BBVA Research (0.80% monthly change).
In May, household consumption slowed compared to April, especially in the second half of the month. Tourism-related spending was the most moderate, while in-city consumption (restaurants, entertainment and urban transportation) remained strong.
In April, the national unemployment rate was 11.2%, 4.3 p.p. lower than a year ago, in the same month and the urban rate was 11.1%, 6.4 p.p. lower than a year ago. Between March and April 2022, the seasonally adjusted unemployment rate decreased by 0.4 p.p. at the national level and by 0.9 p.p. at the urban level.
New vehicle sales have tended to stabilize since 2021, with a higher share of utility vehicles, a lower share of cars and strong growth in cargo vehicles. In 2022 and 2023 we estimate sales similar to the 250 thousand units of 2021. Sales of motorcycles and used vehicles have shown great traction.
In the first quarter, GDP grew 8.5% year-over-year and 1% quarter-over-quarter. Consumption remained a good dynamic driven by spending on durable and semi-durable goods and the services sector. Investment, which performed well, was driven by the purchase of machinery and the advance of intellectual property.
Household consumption accelerated in April. The boost came especially from the services sector. In 2022, Easter occurred without any restrictions on social interaction, boosted tourism and benefited from low statistical bases in April 2021.
Inflation in April was 1.25% on a monthly basis and 9.23% on an annual basis, making it the highest in the last two decades. Market analysts were surprised by the result, which was not only above the estimated average, but also above the maximum of the range of expectations recorded in the BanRep survey.
The headlines about high inflation in recent months reflect a scenario not experienced in the last five years in Colombia and in several decades globally, so it will continue to be a central issue for much of the year. At BBVA Research, we expect an annual variation in inflation of 8.9% in April.