Colombia | April inflation reached 7.16%, supported by a reduction in core inflation

Monthly inflation in April was 0.59% and annual inflation 7.16%, close to market analysts' expectations (0.57%, according to Banco de la República's survey) and in line with our estimate (0.60%).

Key points

• Key points:
• Annual food inflation increased by 126 bps from 1.7% to 3.0%. The rise is associated with two factors: a statistical effect of comparison, in April 2023 the basket registered a relevant decrease; an increase in the perishable basket, where fresh fruits, potato and tomato showed significant increases in the last month.
• Non-food inflation registered an annual change of 8.19%, down 57 bps from the previous month's figure, the largest adjustment since January 2024. The largest decline in annual inflation was observed in administered prices (14.6% in April compared to 15.8% in March). Within the latter, the downward trend in gas, which reached an annual variation of -1.01%, stands out.
• The basket of goods showed the second largest decline in annual inflation, falling by 73 bps to 2.3%. This basket reaches a monthly variation below its historical average 2011-2019 for the third consecutive month.
• Meanwhile, the basket of services registered an annual change of 8.0%, with a decrease of 27 bps compared to the previous month. Adjustments in this are still explained by base effects, while monthly changes remain above their historical average, where a significant monthly and cumulative change in rents stands out.
• BBVA Research expects food inflation to continue to rise during the second quarter of the year, leading to a slow pace of declines in total inflation during this period. Despite this, non-food inflation will continue to decline, allowing total inflation to close 2024 close to 5.4%.

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