Colombia | Inflation remains stable at 6.30% in October

Annual inflation remained stable at 6.30% in October, although it remains 120 bps above the level observed at the end of last year. The stability in annual inflation was explained by offsetting pressures across baskets: while food inflation increased, inflation excluding food declined.

Key points

• Key points:
• Food inflation completed three consecutive months of increases, mainly driven by perishables, likely affected by less favorable weather conditions resulting from the El Niño phenomenon.
• Inflation excluding food completed two consecutive months of declines, mainly driven by goods, although regulated items and services also contributed. In goods, the relief mainly came from vehicles and personal care and cleaning products; in regulated items, from water supply; and in services, from air transport and package holidays. It is worth noting that both goods and regulated items completed two consecutive months of moderation. In the case of goods, this behavior could be associated with the lagged effect of the cumulative exchange rate appreciation throughout the year.
• Rent inflation remained stable at 5.06%, after two consecutive months of increases. This behavior is good news, as it suggests that the additional pressures stemming from the August 10 earthquake may have been temporary.
• We believe that the stability in inflation will be temporary and that inflation will resume its upward trend in the coming months, particularly affected by the intensification of the effects of the El Niño phenomenon, which would impact not only food but also regulated items. In this context, we maintain our forecast of 7.0% inflation at the end of 2026.

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