Inflation rose slightly in Colombia in October, with the overall consumer price index increasing by 0.02% from September to leave the year-over-year inflation rate at 4.05%, according to the National Administrative Department of Statistics (DANE).
This is up from a year-over-year rate of 3.97% last month and puts inflation outside of the central bank’s target rate of between 2%-4% for the first time since June.
This minor uptick was expected by most analysts, including those at the central bank and Bancolombia, the country’s largest bank. The central bank has forecasted inflation to end 2017 at 4.07%. Bancolombia has predicted 4.0%. But the rise is projected to be temporary, as the two institutions expect the rate to drop throughout 2018 to close next year at 3.58% and 3.50%, respectively.
The rate is also well below the 6.48% year-over-year rate in Colombia in October 2016.
Monthly price increases in recreation (up 0.31% from September), housing (up 0.22%), and healthcare were the largest factors in the overall consumer price index rise in October.
The ongoing drop in food prices, which spiked for many product categories last year, is the largest segment holding down the overall index. Food prices overall were down 0.24% compared to last month, with carrots (down 19.82%), peas (down 16.28%), and onions (down 11.82%) showing the sharpest declines. Potatoes bucked the trend with an increase of 21.15%.
The Colombian central bank, Banco de la República, has spent the year more concerned with slow economic growth than inflation. As consumer prices have come down from 2016 highs, the central bank committee has continually cut the nation’s key interest rate from a high of 7.75% late last year to the current 5.0%.