Colombia’s Inflation Hits Lowest Point Since 2021, Raising Questions About Economic Stability

Colombia’s inflation rate dropped to 5.09% in March 2025, the lowest since October 2021, according to the country’s statistics agency, DANE.

This marks a significant slowdown after reaching 5.28% in February, breaking a two-month upward trend. The cumulative inflation for the first quarter stood at 2.62%, slightly below the 2.73% recorded during the same period last year.

Restaurants and hotels drove annual inflation with a 7.34% increase, followed by education at 7.27% and housing, utilities, and gas at 6.29%. Meanwhile, categories such as information and communication saw a decline of 1.43%, while clothing and footwear rose modestly by 1.50%.

Monthly inflation was primarily influenced by housing and utilities, contributing 0.17%, with effective and imputed rents playing a significant role. Regional disparities highlighted stark contrasts.

Bucaramanga reported the highest annual inflation at 7.01%, exceeding the national average by 1.92 percentage points, while Santa Marta recorded the lowest at just 1.63%. Bucaramanga has consistently led inflation rates throughout the first quarter.

Education costs surged with a year-to-date increase of 5.65%, driven by preschool and primary education rising by 6.52% and secondary education by 6.12%. Transportation also showed notable price increases during the first quarter.

Economic analysts noted that structural pressures in services like housing rents and education continue to weigh on inflation despite the deceleration.

The latest data aligns with market expectations, reinforcing hopes for short-term stabilization but keeping inflation above the central bank’s target range of 2% to 4%.

The figures will likely shape upcoming monetary policy decisions as Colombia seeks to balance inflation control with economic growth amid persistent sectoral challenges.