Colombia closed 2022 with an inflation of 13.12%, the highest in 23 years

Colombia closed 2022 with an interannual inflation of 13.12%, the highest figure recorded since 1999, the National Administrative Department of Statistics (DANE) reported this Thursday.

The Consumer Price Index (CPI) of 2022 was 7.5 percentage points higher than that of 2021, when it stood at 5.62%, according to the state agency.

The CPI for December was 1.26%, “well above what we saw in December 2021 (…) and what analysts reported,” added the director of DANE, Piedad Urdinola, at a press conference.

Specifically, inflation in the last month of the year was 0.53 percentage points higher than that of December 2021.

The behavior of inflation in 2022 is explained, according to Urdinola, by “what happens in food and non-alcoholic beverages, which was the trend we observed throughout the year, representing the largest variation within the CPI”, reaching 27.81%.

They are followed by the Restaurants and Hotels sectors (18.54%); Articles for the home and for ordinary conservation, where they stand out “detergents and soaps” (18.25%); Miscellaneous Goods and Services (13.09%); Transportation (11.59%); and Clothing and Footwear (11.22%).

The director of DANE pointed out that Colombia had not experienced a similar inflation figure since March 1999, when the interannual CPI reached 13.51%.

Colombia showed an upward trend in inflation throughout last year, like the rest of the world, forcing the Banco de la República (monetary authority) to gradually raise interest rates to 12%. yearly to curb consumption.

bullish path

For Scotiabank Colpatria’s chief economist, Sergio Olarte, the figures for this Thursday are not encouraging since annual inflation continues “its upward path (…) due to the usual suspects: food, especially perishable foods that continue with inflation above 26%, with some items that are already beginning to drop but still at very high levels such as meat beef”.

“This suggests that the drop in inflation in Colombia is going to be quite slow, especially since this affects the inflation of demand elements such as restaurants, hotels, travel, among others; sectors that have been very dynamic during this time”, considered Olarte.

The analyst advanced that “quite possibly” at the meeting at the end of January the Bank of the Republic will maintain the interest rate hike policy for “somehow discourage consumption and may even go up to a percentage point” the reference rate.

Source: EFE