Inflation in Colombia continues without finding its maximum. After closing 2022 at 13.12%, the National Administrative Department of Statistics (DANE) announced this Saturday that it continued to rise in January, hitting 13.25% over the past 12 months. With this data, it continues to break records in this century, accumulating seven months with numbers over 10%. This is the highest reading since March 1999, when inflation fell to 13.51%.
The increase in January was 1.78%. In January 2022, when inflation was already rising and was 6.94%, it was 1.67%. The month of January always has higher inflation compared to other months as prices are adjusted with the previous year’s Consumer Price Index (CPI) in items such as new leases, government fines or public transport fares.
At the press conference presenting these results this Saturday, DANE Director Piedad Urdinola explained that it was precisely this last sector, transport, that had the greatest impact on inflation. It grew by 3.98%. “The protagonist for this month was transport and it is largely explained by the increase in municipal transport and municipal transport,” he said. While last year food and non-alcoholic beverages accounted for the largest share of the monthly increase, this time transport picked up more: out of 1.78% of headline inflation, mobility accounted for 0.51% and food 0.49%.
Behind the numbers lies a growing human drama: when inflation was hovering around 10%, a lower-class woman from Bogotá, Patricia Villarraga, told this newspaper that meat was often enough for her children to not have one for days can try protein.
The good news comes from others. One is that electricity has slowed its cost rise by 0.71% in January, when it was another factor in cost-of-living increases last year. Another reason is that a downward trend in food price increases is beginning; DANE reminds that staple foods such as bananas, milk or potatoes, although they continue to grow, are gradually slowing down.
Finally, Uridinola stressed that the monthly result fell below the maximum expected by market analysts for the first time in three months, an indication that the pace of the rise could be slowing. The Bank of the Republic has raised the benchmark interest rate over the past year, raising it to 12.75% at its January 27 meeting, a smaller increase than previous ones but reaching the ceiling on borrowing costs this century. For this year, she forecasts that inflation will start to fall towards the second quarter, but will end the year at 8.7%, a less alarming number than the current one, but which in any case implies a significant price increase.
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