Colombia Inflation (CPI, ann. var. %, eop)

Inflation in Colombia

Inflation falls to lowest level since November 2022 in April

Inflation fell to 12.8% in April from March’s 13.3%, slightly undershooting market expectations. April’s result represented the weakest inflation rate since November 2022. The reading was driven by moderating price pressures for food and non-alcoholic beverages.

Annual average inflation rose to 11.8% in April (March: 11.5%). Meanwhile, core inflation edged down to 12.2% in April, from the previous month’s 12.4%.

Finally, consumer prices increased 0.78% in April over the previous month, following the 1.05% rise seen in March. April’s result marked the weakest reading since November 2022.

After two months of stable prints, April’s lower inflation figure suggests that price pressures have passed their peak, boosting the case for the Central Bank to keep rates steady at its next meeting on 10 June, as most of our panel expects it to do. That said, our panelists see inflation persisting at double-digit levels until Q4 due to the lagged pass-through effects of indexation and elevated inflation expectations. An upside risk is posed by sticky core inflation, which remained elevated in April.

Analysts at Scotiabank Colpatria said:

“The signal we received from food inflation is encouraging since it finally reflects the moderation of input prices and the recent dynamic by the PPI. If it continues, it increases the probability of seeing lower-than-expected inflation by the end of 2023.”