Colombia | Inflation eases in May, reaching 5.05%

Summary

Inflation in Colombia eased in May 2025, reaching 5.05% annually, its lowest in 43 months, with a monthly change of 0.32%. This moderation was mainly driven by the non-food basket, led by services and regulated items, correcting April's uptick and paving the way for gradual rate cuts by the Central Bank.

Key points

• Key points:
• The decline was mainly explained by moderation in services (6.1% annual, driven by lower pressure from rents and tourism-related items) and regulated prices (6.3% annual, with energy and gas providing relief).
• Unlike services and regulated prices, goods saw a slight acceleration (1.4% annual), and food also showed a minor increase (4.7% annual), the latter influenced by processed products like oils and dairy.
• While the May result is favorable, the gradual acceleration of goods inflation and lower statistical bases in the second half of the year could limit the pace of disinflation, though a gradual reduction forecast remains.
• The May inflation data strengthens the likelihood of the Central Bank continuing gradual interest rate cuts, although fiscal challenges, global volatility, and labor market resilience remain factors to consider.

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