Colombia: Inflation increases in September, following the first rise in a year in August

Consumer prices rose 0.04% from the previous month in September after increasing 0.14% month-on-month in August, according to the National Department of Administrative Statistics (DANE). The slight uptick in consumer prices was driven by higher prices for housing and education.

Inflation inched up to 4.0% in September from 3.9% in August, which represents the second rise in inflation after a full year of consecutive drops. The increase put inflation at the upper bound of the Central Bank’s target band of 3.0% plus or minus 1.0 percentage point. September’s inflation print came in shortly after the Central Bank decided to halt its easing cycle on 29 September, as upside price pressures increase. Higher inflation in September was the result of increased prices for housing and food. The print was below market expectations of 4.1% inflation.

In September, core consumer prices—which exclude volatile items including fresh food and fuel—rose 0.11%, falling marginally from 0.13% in August. Meanwhile, core inflation fell to 4.9% in September from 5.0% in August.

Panelists participating in the LatinFocus Consensus Forecast expect that inflation will end 2017 at 4.2%, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel expects inflation to end the year at 3.5%, which is also up 0.1 percentage points from last month’s forecast.