Published on Wednesday, August 9, 2023

Colombia | Inflation continues its decline in July: 11.78%

In July, monthly inflation was 0.50% and annual inflation 11.78%, above the average of market analysts' expectations (0.30%), and even above the maximum expected according to Banco de la República's survey. Compared to the annual change in June, inflation fell 34 bps.

Key points

  • Key points:
  • Annual food inflation slowed its pace of decline, falling 104 bps from the previous month to 13.2%. Within the basket, processed foods and meats continued to decline, while perishable products pushed upwards, as part of their cycle and driven by transport difficulties.
  • Core inflation declined for the first time since October 2021, dropping 18 bps from the previous month's figure to 11.44%. The result was driven by the basket of goods, which fell to 12.8% in the annual change, largely favoured by base effects.
  • The baskets of administered prices and services still maintain increases in annual changes, with inflation rates of 15.8% and 9.2% respectively. Within these, fuel and utilities, as well as meals at table service establishments and rents continue to generate pressures.
  • BBVA Research expects food inflation to continue moderating at a more gradual pace, with the risk of some pressures from the El Niño phenomenon. In core inflation, fuels will continue to lead pressures until the last quarter of the year, however, base effects will favour declines in the path. With the above, total inflation could close the year at 9% and will continue to ease in 2024.

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