Inflation in Colombia shoots up in January more than expected

Colombia registered an inflation of 1.67% in January, the government revealed on Saturday, a figure much higher than expected by the market and that moves the indicator further away from the goal established by the Central Bank, which will play in favor of additional increases in the interest rate.

The rise in consumer prices far exceeded the median in a Reuters poll in which the market expected a 0.91 percent rise.

Main increments in the month they occurred in the prices of clothing and footwear with 4.03%, in food and non-alcoholic beverages with 3.79%, in goods and services for the home with 2.93% and in restaurant services and hotels with 2.40 percent.

Other increases were recorded in transportation prices with 1.85%, in the health sector with 0.93%, in alcoholic beverages and tobacco with 0.72%, in recreation and culture with 0.58%, in public services and accommodation with 0.46%, in the area of ​​information and communication with 0.13%, while education did not report variation.

In the accumulated of the last 12 months until January, inflation jumped to 6.94%, more than double the punctual goal established by the Central bank, of 3 percent.

The pressures on inflation come from internal factors such as the increase in the minimum wage of 10.07% that the Government agreed with the unions and employers for this year, almost triple compared to the previous year.

In addition, from the external front, prices have increased due to transportation costs derived from bottlenecks in the supply chain, as well as due to spikes in the prices of raw materials, a phenomenon that has spread throughout the world. world.

The expectations of inflation for the total of this year they rebounded in the January survey to 4.55%, higher than the 4% that the December consultation showed.

Given this, the Colombian Central Bank surprised the market at the end of January with an increase of 100 base points in its interest rate up to 4% and the market expects that the entity will continue raising it to a level close to 6% before the end of this anus.

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