Colombia | Inflation’s upward trend continues: it exceeds 6% in June

Summary

Inflation in June continued its upward trend, reaching 6.14% year-on-year, in line with BBVA Research expectations, representing an increase of 30 bps compared to May and 104 bps relative to the end of last year.

Key points

• Key points:
• The increase relative to May was mainly explained by food and, to a lesser extent, by regulated items.
• In food, the increase was driven by the rebound in perishables, associated with supply shocks related to the lower availability of these products. As a result, the moderation in inflation observed in May was temporary.
• In regulated items, the increase was explained by higher electricity and gas tariffs.
• Meanwhile, services inflation remained relatively stable, reflecting offsetting forces within the basket. While some components, such as cinemas and theaters, residential property management services, and rents exerted upward pressure, air transport showed moderation.
• Looking ahead, we expect inflation to continue increasing over the remainder of the year, reaching levels close to 7.0%, driven by the lingering effects of the minimum wage increase, strong domestic demand, the imminent arrival of the El Niño phenomenon, and the risk of the conflict in the Middle East resuming.

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