Colombia | In March annual headline inflation continued on the rise, reaching 8.5%

March monthly inflation was 1.0%, more than double its historical average (0.41% average between 2011-2019) and annual inflation was 8.53%, placing it above analysts' expectations (0.90% monthly according to the BanRep survey) and BBVA Research's projection (0.84%).

Key points

• Key points:
• The food division continues to present important pressures, with a monthly variation of 2.84%, significantly affected by the continuity of cost increases for agricultural producers, which is reflected in the PPI results.
• The shelter division also recorded significant increases, with a monthly change of 0.58%, where water and electricity services account for a large part of the increase.
• In the annual comparison, the basket of administered goods slowed its pace of increase, declining by 74 bps from February, while the tradable and non-tradable baskets accelerated from the previous month by 34 bps and 26 bps respectively.
• The VAT-free day generated negative contributions, offsetting the total inflation result by 7 basis points. The main effects were seen in the clothing division (-1.78% m/m) and information and communication division (-0.19% m/m).

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