Colombia’s Inflation Slows in May, But Price Pressures Remain for Households and Business

Colombia’s official statistics agency, DANE, reported that the country’s annual inflation rate slowed to 5.05% in May 2025, down from 5.16% in April. This marks a slight improvement, but inflation remains well above the central bank’s 3% target.

The monthly consumer price index rose 0.32%, also below analyst forecasts. These figures show that while inflation is decelerating, it continues to challenge both households and businesses.

Food and non-alcoholic beverages led the price increases in May, rising 0.60% for the month. Housing and public services followed, with a 0.48% increase.

Over the past year, restaurants and hotels saw the largest annual jump at 7.71%, while education costs rose 7.38%. Transportation prices also climbed, up 5.29% compared to last year, reflecting higher costs for fuel and services.

Food prices, though slightly easing on an annual basis, still increased 4.61% over the year. Regional disparities remain significant. Bucaramanga recorded the highest annual inflation at 6.49%, while Santa Marta posted the lowest at 1.18%.

Major cities like Bogotá and Cali experienced monthly inflation rates near the national average, but Cartagena saw the sharpest monthly increase at 0.93%.

These differences highlight how local factors and supply chain issues affect inflation unevenly across Colombia. Colombia’s central bank cut its benchmark interest rate by 25 basis points to 9.25% in April, surprising markets.

The decision reflected slightly improved inflation predictions and ongoing fiscal challenges. However, the persistent inflation seen in May complicates the outlook for further rate cuts.

Analysts now expect inflation to remain above the central bank’s target through the end of 2025, with the latest consensus forecast at 4.8%. The real story behind these numbers is that Colombia’s inflation, while lower than in recent years, remains stubbornly above target.

Essential costs like food, housing, and services continue to rise, squeezing household budgets and raising costs for businesses. The central bank faces a tough balancing act as it tries to support economic growth while keeping inflation in check.

For businesses and families, the challenge is to adapt to a landscape where essential costs keep rising and price stability remains elusive.

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