Colombia: Inflation falls in May
June 5, 2017
In May, consumer prices rose 0.23% from the previous month, which was below April’s 0.47% reading and market expectations of a 0.32% increase. According to Colombia’s National Statistics Institute (DANE), May’s print was mainly driven by higher prices for food and housing.
In May, inflation came in at 4.4%, which is the lowest reading since July 2015. Since reaching a multi-year high of 9.0% in July last year, inflation has continuously fallen as a result of the Central Bank’s tightening cycle as well as the fading of temporary supply shocks that had fanned price pressures in the past. However, inflation is still above the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 3.0% target.
Core consumer prices, which exclude volatile items such as fresh food and fuels, increased 0.19% from the previous month in May, slightly below the 0.53% rise recorded in April. Finally, core inflation was stable in May at April’s 6.4% reading.
Author: Luis Lopez Vivas, Economist