Colombia’s Inflation Forecast

By Nelson Bocanegra

BOGOTA (Reuters) – Colombia’s 12-month inflation is expected to continue decelerating in September, despite the impact of a truckers’ strike, according to a Reuters poll conducted on Wednesday. Analysts’ expectations for this year remain stable.

According to the median forecast from 20 analysts, Colombia’s 12-month inflation will reach 5.83% through September, lower than the 6.12% reported at the end of August, but still significantly above the central bank’s long-term target of 3%.

If the median forecast is met, consumer prices will rise 0.26% in September, similar to the 0.25% from the same month last year but higher than the 0% recorded in August.

Analysts’ estimates ranged from 0.17% to 0.38%.

In September, “the education sector is reactivated by the school calendar, while we expect to see moderate inflation in the rest of the sectors,” said Jackeline Pirajan, Scotiabank’s chief economist for Colombia. She noted that the impact of the national strike on food prices was noticeable at the beginning of the month but “is fading quickly.”

The country experienced a four-day truckers’ strike in the first week of September, protesting an increase in diesel prices, which caused food and fuel shortages in major cities.

The significant slowdown in inflation has been the main reason for the central bank’s reduction of its interest rate by 275 basis points since the downward cycle began in December 2023.

On Monday, the monetary authority cut the rate by 50 basis points to 10.25%, following a divided vote where three of the seven board members requested a reduction of 75 basis points. The remaining four members were more cautious to ensure inflation control.

Poll respondents now expect inflation to end this year at 5.6%, almost unchanged from the 5.61% projected last month, while expectations for the end of 2025 have slowed to 3.70%, down from 3.75% in the previous survey.