Colombian Inflation Rate Drops to 3.69% in January

For the first time since last September, the inflation rate in Colombia landed within the central bank’s target range, dropping to 3.68% year-over-year, according to the National Administrative Department of Statistics (DANE).

This is down from the 4.09% inflation experienced in 2017 and brings the rate back into 2%-4% target set by the Banco de la República, which has forecast inflation to finish 2018 at 3.47% and fall further to 3.33% by the end of 2019.

Overall, the consumer price index (CPI) rose by 0.63% in January, well below the 1.02% seen in January 2017 and 1.29% in January 2016.

The CPI category that saw the largest increase over the past month was food prices, which jumped by 1.20%. This, however, was below the 1.62% increase seen last January and well below the 2.82% seen in January 2016, when the effects of the El Niño weather phenomenon wrecked havoc on crops.

READ MORE: Colombian Central Bank Cuts Interest Rate by 25 Basis Points to 4.5%

The biggest price spikes in terms individual foods were seen in tomatoes (up 21.77%), oranges (11.40%), and carrots (11.21%).

Healthcare (1.16%) and transportation (0.70%) ranked second and third in terms of rising prices.

The smallest price increases in January came in the categories of education (0.01%), communications (0.04%), and clothing (0.07%).

This month, the central bank, in a 4-3 vote among its members, opted to lower the nation’s benchmark interest rate by 25 basis points to 4.50%. The Banco de la República noted that this would be the final reduction of a rate-cutting cycle that began in December 2016, when the Bogotá-based institution began prioritizing the threat of slow economic growth above Colombia’s then-high inflation rate.

(Credit: Jared Wade)