Published on Thursday, June 8, 2023 | Updated on Wednesday, June 14, 2023

Colombia | Inflation moderates again: in May it stood at 12.36%

Inflation in May was lower than expected by market analysts, consolidating at 0.43% in monthly terms and at 12.36% in annual terms, lower than the average indicated in the monthly survey of Banco de la República of 0.61%.

Key points

  • Key points:
  • As expected, food inflation continued to fall, standing at 15.6% compared to 18.4% in the previous month. This result was driven by declines in inflation in all items of the basket, but mainly by decreases in the perishables sub-basket, associated with increased supply factors.
  • Despite the above, core inflation still showed increases in annual terms, reaching 11.6%. Within this, inflation of the administered prices basket continues to accelerate in annual terms, reaching 15.7%, pressured by products such as gasoline, electricity and water.
  • Services inflation, the most important component of total inflation, showed a slight increase, standing at 9.1%. In this, meals in service establishments and meals prepared outside the home, as well as rents, continue to play a leading role.
  • BBVA Research forecasts that inflation has already peaked and will continue to moderate over the coming months, with a more pronounced decline in the second half of the year, helped by a rapid pace of deceleration in food prices. However, the El Niño phenomenon and its effects on headline inflation remain a risk. Nevertheless, the decline in inflation is not expected to slow down, but to decline at a slower pace.

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