Published on Monday, September 5, 2022

Colombia | Inflation surprised on the upside again in August, reaching 10.8%

In August, monthly inflation was 1.02% and annual inflation 10.84%, above the average expectation of market analysts (0.54% in monthly variation according to the monthly survey of Banco de la República) and even above their maximum forecast of 0.79%.

Key points

  • Key points:
  • The food division again surprised strongly to the upside in August, with annual inflation accelerating by 92 bps to 25.57%. Within the division, processed products took centre stage, increasing by 154 bps from the previous month.
  • In terms of core inflation, the accumulated increase in food prices was reflected in the restaurants and hotels division, which reached an annual inflation of 15.73% due to higher costs of its inputs.
  • Costs for the production of personal and household care items generated significant pressures in the miscellaneous goods and services and furniture and household goods divisions.
  • Utility price increases also stood out in August, with pressures from electricity, gas, and water, leading the accommodation and utilities division to annual inflation of 6.74%.
  • BBVA Research expects inflation to remain under upward pressure for the remainder of the year, with food pressures extending and core inflation continuing to accelerate, leading to an upward revision in analysts' year-end inflation estimates.

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