Published on Thursday, November 9, 2023

Colombia | Annual inflation in October falls more than expected: 10.48%

Monthly inflation in October was 0.25% and annual inflation was 10.48%. The result is below the expectations of market analysts, who according to the survey of Banco de la República expected an average of 0.37%.

Key points

  • Key points:
  • The main surprise came again from food, which reached an annual variation of 10.36%, about 111 bps below the previous figure. This result is largely explained by a lower contribution from perishable products, favored not only by lower increases in this sub-basket, but also by base effects.
  • On the other hand, core inflation stood at 10.51% in annual variation, decreasing by 37 bps compared to the previous month. The basket of goods took the main role, with decreases of about 93 bps, standing at 9.5%, largely explained by base effects.
  • The basket of services remained at 9.1% and shows pressures from sub-clases such as rents, airline tickets, package tours, meals away from home, cinemas and theaters, suggesting a continuity in demand pressures.
  • On the other hand, the administered prices basket decreased by 59 bps to 15.2%, mainly favored by the pause in gasoline price increases, while maintaining pressures from components such as electricity, gas and urban transportation.
  • BBVA Research forecasts that inflation will continue to moderate in the last months of the year; however, it could see additional pressures from the food basket due to the effects of the El Niño phenomenon, which would lead it to close the year close to 9.7%. For 2024, indexation effects are expected during the first part of the year, which will moderate towards the second part of the year, leading to a closing close to 5.4%.

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