Colombia’s Inflation Dips Below 6%, Marking Three-Year Low

Colombia’s inflation rate has fallen to its lowest point in nearly three years. The National Administrative Department of Statistics (DANE) reported that the Consumer Price Index (CPI) reached 5.81% annually in September.

This figure represents the third consecutive month of decline in inflation rates. The September data surpassed market expectations. A Citibank survey of 23 economic research centers projected an inflation rate of 5.84%.

The monthly variation for September alone was 0.24%, lower than last year’s 0.54%. Year-to-date inflation from January to September stood at 4.58%. Education led the annual variation with a 10.76% increase.

Restaurants and hotels followed with a 9.08% rise. Housing, water, electricity, gas, and other fuels came third at 8.49%. Alcoholic beverages and health saw increases of 6.24% and 6.16%, respectively.

Some sectors experienced minimal price hikes. Information and communication decreased by 0.76%. Recreation and culture dropped by 0.01%. Clothing rose by 2.22%, furniture by 2.31%, and food and beverages by 2.73%.

Bucaramanga recorded the highest inflation rate at 6.95%. Riohacha (6.39%), Valledupar (6.31%), and Bogotá (6.12%) followed. Villavicencio (4.3%) and Neiva (4.4%) had the lowest rates.

DANE Director Piedad Urdinola explained that data collection spans the entire month. The recent strike, lasting from September 2nd to 6th, had a limited impact on prices.

Urdinola emphasized that while the CPI measures variations, it cannot determine specific causes. The Central Bank remains cautious about inflation. It reduced interest rates by 50 basis points to 10.25%.

This decision was less than market analysts’ expectations of 10.0%. The Bank cited the need for a contractionary monetary policy due to inflation still being double the target.