Colombia: Inflation drops to an over three-year low in November
Latest reading: Inflation eased to 5.2% in November from October’s 5.4%. November’s figure marked the weakest inflation rate since October 2021 and undershot market expectations. That said, it remained entrenched above the Central Bank’s 2.0–4.0% target. Looking at the details of the release, softer increases in prices for housing and utilities plus transportation outweighed faster cost pressures for food and non-alcoholic beverages.
Accordingly, the trend pointed down, with annual average inflation falling to 6.9% in November (October: 7.3%). Meanwhile, core inflation edged down to 5.9% in November from the previous month’s 6.0%.
Lastly, consumer prices increased 0.27% over the previous month in November, contrasting October’s 0.13% drop. November’s figure was the highest reading since June.
Outlook: Our panel expects inflation to average around current levels in Q4 2024 before resuming a downward trend and entering the Central Bank’s target in H2 2025. That said, ongoing monetary policy easing and a fading high base effect will dent momentum in the disinflation process. Moreover, risks are tilted to the upside and include a weaker-than-expected currency, a growing hydrocarbons supply shortfall and a stronger-than-expected La Niña weather event.