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Colombia Inflation July 2023

Colombia: Inflation falls to lowest since September 2022 in July 2023

Inflation came in at 11.8% in July, which was down from June’s 12.1%. July’s result represented the lowest inflation rate since September 2022. The slowdown was due to a lower rise in prices for food. However, the reading exceeded market expectations. As in previous months, this was in part due to the widespread indexation of prices in the economy; goods and services prices indexed to inflation continued to rise at near double-digit paces in July.

The trend pointed up slightly, with annual average inflation coming in at 12.4% in July (June: 12.3%). Meanwhile, core inflation fell to 11.3% in July from the previous month’s 11.6%.

Finally, consumer prices rose 0.50% from the previous month in July, picking up from the 0.30% rise logged in June.

Looking ahead, our panelists expect inflation to remain elevated throughout the rest of 2023, ending the year nearly three times higher than the midpoint of the Central Bank of Colombia’s 2.0–4.0% target range. Widespread indexation will continue to frustrate the Central Bank’s efforts to bring down price pressures. The main upside risk ahead is the El Niño weather pattern. El Niño typically hits global agricultural supply, raising food prices in the process.

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