What Jumps Out: Colombia Is Now Getting Into Gear in 2024

The highlight of the week was clearly the 0.45% inflation print for December from the National Administrative Department of Statistics (DANE) — which dragged the full-year figure or 2023 to 9.28%, below the 9.45% expected.

Banco de la República will now come under extreme pressure to lower rates by at least 25 basis points when the committee meets next. There will be ongoing concerns about the impact of El Niño on electricity prices — which are at up 35% year-over-year on the coast — but food registered its third straight monthly decline and transport only had a mild impact despite rising gasoline prices.

Fedesarrollo has been busy this week. The organization reported a slight improvement in consumer confidence for December from -20.9% to -17.3%. This was driven by a 6.6% improvement in household outlook, in all likelihood helped by the recent improvement in the consumer price index (CPI).

Final car sales numbers for 2023 were as poor as expected, falling by 30% to 186,222. But there was better news on electric and hybrid vehicles. They sold a total of 31,490, up 12% year-over-year. This number is coming from a low base, and 88% of these sales were hybrid due to the ongoing lack of infrastructure. However, there is at least a willingness to advance. As per much of the world, there is a huge rise in Chinese brands on the pure electric car market.

In terms of the exchange rate, the Colombian peso had an interesting week (closing Thursday at 3,929 pesos to $1 USD). It weakened on the lower CPI number before stabilizing —  and that was before the US inflation data print, after which it fell slightly once more.

Colombia’s currency, however, appears to be very much rangebound at this juncture.

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