What Jumps Out: PPI Fell by 1.9% Last Month in Colombia — Let’s Hope CPI Data Is This Good

As we await tomorrow’s release of the data for November CPI — which hopefully will finally get Banco de la República to wake up and cut rates — there have already been a few developments this week which are worthy of mention.

Photo: Banco de la Republica, the central bank of Colombia, in Bogotá.

We already have the PPI data for November, and there was another healthy decline — especially the year-over-year number of -5.65%. By comparison, 12 months ago, PPI was rising by 24.53% year-over-year! On a monthly basis, there was a drop of 1.91% in November.

Let’s hope the CPI data is even close to as good.

Meanwhile, exports in October were once again lower year-over-year (-1.5%) at $4.15 billion USD. Though there was nothing too dramatic at a headline level, when boring down there, was also little to cheer. The overall number was propped up by oil sales, which rose 28.1% year-over-year and added back in 8 points, while coal had the opposite effect (with a fall of -36.9% and -8.6 points, respectively). While agriculture (-14.3%) slipped, there was a bump for manufacturing (+5.4%) driven by (excuse the pun) a big jump for transport equipment (+38.2%).

The health reform has now finally passed through the House of Representatives. A couple of articles were shaved off, but it is pretty much where it was a week ago. Next year, after their lengthy holidays, the Senate will begin deliberations and that will be another lengthy process. After that, the Supreme Court will take a look.

There are, naturally, a lot of emotions surrounding the reform, ranging from ecstasy to trepidation depending on your standpoint. But, after six months of Congress’ time being burnt up already, the sluggishness of the Colombian system has been paid bare once again.

In other news, the third quarter current account deficit of the nation dropped once again to -1.7%, marking the fourth consecutive quarterly drop and the lowest imbalance since the second quarter of 2009. There are a myriad of factors involved. But, given the concerns in 2022 over a President Gustavo Petro-led government’s capacity for economic discipline, this is a positive development.

Bancolombia released its October construction and housing report, and once again there was little in terms of positive news. New home sales were down 44.6% amid an environment of high interest rates.

Leonard Villar, are you paying attention?

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