Colombia inflation rate seen rising again in January By Reuters

By Nelson Bocanegra

BOGOTA (Reuters) – Colombia’s inflation is forecast to have increased again in January, pushed up by wage growth and higher food and gasoline prices, a Reuters poll showed on Wednesday, with analysts forecasting consumer price growth had further to run.

According to the median taken from 23 analysts’ forecasts, monthly inflation is expected to have risen to 1.65% in January, up from 1.26% in December and close to the 1.67% seen in January 2022.

The estimates ranged from 0.3% to 2.20%.

The government’s DANE statistics agency will publish inflation data on Saturday, Feb. 4.

If the median forecast is correct, annual inflation in January will have risen 13.10%, more than four times greater than the central bank’s 3% target.

Colombia’s 12-month inflation in December was 13.12%.

The growth could be explained in part due to the affect of a 16% rise in the minimum wage on the cost of goods and services, as well as higher gasoline prices pushing up transport costs and higher inflation in the food sector, the analysts said.

Inflation will continue to rise in the first quarter before beginning a moderate descent, the analysts said.

“The January number might not be the peak, on the optimistic side we will reach between 13.5% and 14% before seeing a decline,” said Munir Jalil, chief economist for the Andean region at bank BTG Pactual.

Analysts now expect the annual inflation rate to hit 8.75% by the end of the year, up from the 7.56% in December’s survey, and project the metric could stand at 5% in 2024, up from previous forecasts of 4.01%. The 12-month inflation rate is only seen returning to the central bank’s target in 2025.

Rampant inflation has led the central bank to hike its benchmark interest rate by 1,100 basis points to its current level of 12.75%.

Central Bank board members and most analysts expect monetary tightening to be close to its end.