By Nelson Bocanegra
BOGOTA (Reuters) – Colombia’s inflation likely slowed in September due to a moderation of domestic consumption, a Reuters poll revealed on Friday, though forecasts for the year rose due a spike in energy prices amid the impact of the El Nino weather phenomenon.
According to the median forecast from 16 analysts, consumer prices in September were seen up by 0.51%, slower than the 0.70% recorded in August and 0.93% in the same month last year.
Forecasts ranged between 0.40% and 0.74%.
If the median estimate is met, Colombia’s 12-month inflation through September would hit 10.98%, slower than the 11.43% through August but far from the central bank’s 3% target.
“Inflation has proved that its correction is fragile and highly dependent on some volatile elements such as food. In that sense, the decline in inflation could take longer than anticipated,” said Jackeline Pirajan, an analyst at Scotiabank in Colombia.
The government’s DANE statistics agency will publish data on September’s inflation on Oct. 6.
Forecasts for Colombia’s inflation in 2023 rose to 9.30%, compared to an estimate of 8.90% in last month’s survey. Expectations for 2024 now see inflation closing at 5.10%, higher than the 4.45% forecast last month.
High inflation is the main reason why Colombia’s central bank hiked its benchmark interest rate by a total of 1,150 basis points between September 2021 and last April, taking it to 13.25%.
The bank has kept the rate steady since June.
In a recent Reuters poll, all 21 analysts forecast the bank’s board would hold the rate steady during its meeting on Friday.
“Inflation in Colombia continues to be at double-digit levels unlike other countries in the region. A rate cut can have a rebound effect on prices,” brokerage Casa de Bolsa said in a research note.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by David Gregorio)
