Food Pushed Inflation To 3.42% In June, Says Bancolombia

According to analysis provided by Bancolombia, Colombia’s consumer price index recorded a monthly increase of 0.27%, coming in at 6 basis points higher than the 0.21% expected by economic analysts. The inflation rate is higher than that of the past decade, 0.23% Costs of produce (food) drove the increase, buoyed by increases in the cost of housing, entertainment and transportation.

The annual inflation rate is tracking at 3.42%, continuing an upward trend with food costs the greatest contributor. Food inflation has peaked since February 2017 at 4.83%. Without food, Inflation tracks at 3.16%, close to the Central bank’s target rate of 3%.

• In June, monthly inflation reached 0.27% and annual inflation 3.42%.
• The monthly result was mostly explained by food inflation (0.57%) and transportation (0.46%), followed by housing (0.07%) and entertainment (0.53%).
• Inflation ex-food fell to 3.16% YoY, while the ex food and regulated figure remained stable at 2.55%.
• This report suggests that, against our expectation of inflation of 3.4% by the end of 2019, some upward risks persist.
• Bancolombia believes that the upward evolution of inflation will not result in an interest rate movement by the Central Bank.

Bancolombia in the report shared its opinion that though there are some upward pressures on inflation rates, they don’t expect those to be sufficient to cause a Central Bank interest rate move.