Colombia | Inflation decreased to 5.3% in November, after four months of increases

Summary

November inflation was 0.07% monthly and declined to 5.3% annual, its first drop after four consecutive monthly increases. The fall was driven mainly by food and some services, while regulated prices continued to put upward pressure via water and fuel tariffs.

Key points

• Key points:
• Food inflation fell 0.72% monthly and eased to 5.74% annual (-90 bps versus October), mainly due to perishables such as carrots, tomatoes, onions and fruit, and processed items such as rice; potatoes and meat are still adding upward pressure.
• Inflation excluding food edged down slightly to 5.2% annual (-5 bps versus October), mainly explained by services.
• In services, inflation fell to 5.7% on lower prices for cinemas and theaters, package holidays and rents, although there were increases in fixed and mobile communications. Meanwhile, goods inflation remained stable at 2.6%. Regulated inflation accelerated to 6.3% annual due to higher water and fuel tariffs, despite some relief from domestic gas.
• The result supports Banco de la República’s cautious stance and suggests that policy rates are likely to remain unchanged unless a more sustained decline in inflation is consolidated.

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