Colombia | Inflation increases in July, to 4.9%

Summary

Monthly inflation in July stood at 0.28%, exceeding analysts’ expectations. As a result, the annual inflation rate rose to 4.9%, marking an 8 basis point increase compared to June’s figure. This outcome was mainly driven by an acceleration in the inflation of perishable food items.

Key points

• Key points:
• The acceleration in inflation was primarily explained by food prices, which recorded a monthly variation of 0.82% in July and an annual rate of 4.94% (+63 basis points compared to the previous month).
• Core inflation, excluding food, posted a slight decline in its annual variation, standing at 4.9% (-5 bps versus June). This result was entirely driven by the regulated prices. Inflation excluding both food and regulated items—closely monitored by the Central Bank (Banco de la República)—showed a mild uptick, reaching 4.79% (+2 bps).
• The moderation in annual inflation for regulated items was explained by the behavior of water supply prices (base effect) and gas (which posted a significant negative monthly variation). As a result, the annual variation of the regulated sub-basket stood at 5.2%.
• Services maintained a stable annual variation of 6.0%. This was the result of offsetting trends: on one hand, rental inflation eased, while on the other, inflation for meals outside the home and telecommunications showed some upward pressure.
• Goods registered a renewed increase, albeit at a slower pace than in previous months. Their annual variation stood at 1.7% (+8 bps versus June). Key contributors to this acceleration included pharmaceutical products, household cleaning supplies, and airfares.

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