Colombia’s year-over inflation rate dropped very slightly in April, coming in at 3.13%. While this was just 0.01% below the rate recorded in March, this represents the fifth straight month of decline, according to the National Administrative Department of Statistics (DANE).
During April, the consumer price index rose by 0.46%, with housing costs (up 0.79%), food prices (0.66%), and healthcare experiencing the largest increases. Costs related to entertainment were actually down by 0.32% in April, while education, clothing, and communication were all flat.
Wit inflation continuing to remain within the Colombian central bank’s target range of 2%-4%, the Banco de República has been emboldened to continue making interest rate cuts within the easing cycle that began in December 2016.
After another 25-basis-point reduction last month, the central bank has now cut the benchmark interest rate by 350 basis points, from a high of 7.75% in 2016 to the current 4.25%.
While the consensus expects last month’s move to be the final cut in this cycle of intervention, one board member, Jose Antonio Ocampo, recently said that persistently low inflation, alongside ongoing concerns about slow economic growth, could leave the door open another decrease in 2018.
Despite the slight drop in April in the annual inflation rate, however, the CPI rise this month was above the prediction of Bancolombia, which forecast a rise of only 0.18% compared to the actual 0.46% uptick.