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Colombia Inflation April 2024

Colombia: Inflation falls to over two-year low in April

Inflation came in at 7.2% in April, which was down from March’s 7.4%. April’s reading represented the lowest inflation rate since January 2022 and was largely in line with market expectations. The result was driven by moderating price pressures for housing and utilities, restaurants and hotels, and transport.

Accordingly, the trend pointed down, with annual average inflation coming in at 9.9% in April (March: 10.3%). Meanwhile, core inflation fell to an over two-year low of 7.3% in April, from the previous month’s 7.6%.

Finally, consumer prices increased 0.59% over the previous month in April, below the 0.70% rise seen in March. April’s result marked the weakest reading since December 2023 and had also been anticipated by markets.

Our Consensus is for inflation to keep declining through the fourth quarter of 2025, and to average lower this year than last. That said, over 2024 as a whole, our panelists expect price pressures to outpace the Central Bank’s target of 2.0–4.0%. Disinflation will likely slow once the impact of interest rate cuts fully trickles down into the real economy.

Analysts at Scotiabank Colpatria commented:

“The mixed picture between goods and services inflation continues. Goods-related inflation decreased […] below [the] inflation target, but explained mainly by the disinflation of tradable goods. In the case of services, the picture is still challenging, […] affected mainly by the indexation in key prices such as rent fees. All in all, today’s results would not be enough to convince the cautious side of BanRep’s board. Instead, we think they will continue the easing cycle at a 50-bps pace with a split vote, like in the previous couple of meetings.”

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