Colombia Inflation August 2016

Colombia

Colombia: Inflation plunges in August

September 5, 2016

The Central Bank’s (BanRep) efforts to fight inflation through tighter monetary policy seem to be finally paying off. In August, consumer prices dropped 0.32% over the previous month (July: +0.52% month-on-month), which was the first monthly drop in nearly three years and the sharpest in over a decade. In addition, the drop in consumer prices in August contrasted market expectations of a 0.16% increase. According to the Colombia National Statistics Institute (DANE), food prices decreased the most over the previous month as food supplies recovered from the El Niño-induced drought and the truckers’ strike came to an end. The communication and recreation components of the price index fell further in August.

Inflation fell to 8.1% in August, which is still well above the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 3.0% target, after peaking at a record high of 9.0% in July. Commenting on the latest inflation result and its evolution, Ben Ramsey, Emerging Markets Sovereign Risk Analyst and Katherine V. Marney, Economist at JP Morgan said:

“12-month inflation dropped markedly from 8.97% to 8.10%, in our view confirming that the peak for inflation has been reached. Indeed, we see a sharply downward sloping trajectory from here until the middle of 2017 given a strongly favorable base effect and fading supply shocks. We see inflation ending 2016 at 6.0% (down from 6.4% before) and moving back into the 3%+/-100bp target range by July.”

Core consumer prices, which exclude volatile items such as fresh food and fuels, jumped 0.34% over the previous month in August, well above the 0.08% rise in July. Finally, core inflation inched up from July’s 7.0% to 7.1% in July, continuing the upward trend that began in mid-2014.

Panelists participating in the LatinFocus Consensus Forecast expect that inflation will close 2016 at 6.3%, which is unchanged from last month’s forecast. For 2017, the panel expects inflation to end the year at 4.0%.


Author:, Economist

Sample Report

Looking for forecasts related to Inflation in Colombia? Download a sample report now.

Download

Colombia Inflation Chart


Colombia Inflation August 2016

Note: Year-on-year and month-on-month variation of cons. price index in %.
Source: Colombia National Statistical Institute (DANE).


Colombia Economic News

  • Colombia: Inflation remains steady in June

    July 5, 2018

    According to the National Department of Administrative Statistics (DANE), consumer prices rose 0.15% over the previous month in June, a smaller rise than the 0.25% month-on-month increase in May.

    Read more

  • Colombia: PMI shoots up to two-and-a-half year high in June

    July 3, 2018

    The seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI) climbed to 53.0 in June, up from 51.1 in May, which marks the highest result since January 2016.

    Read more

  • Colombia: Central Bank keeps interest rate on hold in June

    June 29, 2018

    At its 29 June Board of Directors meeting, Colombia’s Central Bank (Banco de la República, BanRep) unanimously voted to maintain the benchmark interest rate at 4.25%, following a rate cut by 25 basis points at its last meeting held in April.

    Read more

  • Colombia:

    June 19, 2018

    The Fedesarollo consumer confidence index shot up to 8.9 points in May from 1.5 points in April, moving further above the zero-point threshold separating optimism from pessimism among consumers.

    Read more

  • Colombia: Industrial production records stellar expansion in April

    June 15, 2018

    According to data released by Colombia’s National Administrative Department of Statistics (DANE) on 15 June, industrial output expanded 10.5% over the same month of the previous year in April, contrasting a revised 1.2% year-on-year contraction in March (previously reported: -1.4% year-on-year). Looking at a breakdown of the data, 34 out of the 39 industrial activities recorded an upturn, while the remaining five categories registered a decline.

    Read more

More news

Search form