Inflation latest publications
In early 2022, we face a global economic scenario with an eye still on the pandemic, but with a return to macroeconomic management issues that seemed forgotten for decades—high inflation and the tapering of monetary stimulus.
The Colombian economy will grow 4.0% in 2022 and 2.8% in 2023, with inflation pressures that will gradually moderate from the second half of this year. The monetary policy intervention rate will turn contractionary in mid-2022. The great challenge for the economy is to increase formal employment and generate more savings.
Inflation in December maintained its upward trend and again surprised on the upside with a monthly variation of 0.73%, closing the year at 5.62%. Inflation without food had a monthly variation of 0.44% and was 3.44% in annual terms, 8 basis points higher than in November.
The Consumer Price Index of Lima registered a variation of 0.78% MoM in December. This is mainly a result of higher household fuel prices and the seasonal increase in the price of meat and transportation.
Consumer prices increased by 13.58% in December significantly above expectations resulting in an annual inflation of 36.1% up from 21.3% the month before. We expect consumer inflation to hover above 40% throughout the year before declining to near 30% at the end of the year, helped by the favorable base impact in December.
The global economy beat forecasts in 2021, with a more positive than expected first half to the year — driven by the restart in activity and the rollout of vaccinations. However, the second six months were more moderate, affected by supply chain disruptions and rising inflation.
As we reach the end of the year, it's time to take stock of the last twelve months. We've seen that the best economic policy in 2021, was the rapidly rolled out, mass vaccination program. We have also seen that we can still create inflation — though this time most of it has come from the supply side rather than from demand.
The markets have performed well in 2021, even taking into account the recent corrections. A successful vaccination rollout supported the reopening of the economy which, along with the various fiscal stimulus packages, helped drive the recovery in domestic demand and increased investor appetite.