Colombia Inflation Cools, But Prices Still Suffer Sharpest Climb Since 1999

Colombia’s consumer price index rose 13.28% in February from a year earlier, a smaller jump than expected, but the fastest increase since 1999, the country’s statistics agency said Saturday

A supermarket in Cúcuta, Colombia.
By Oscar Medina
March 04, 2023 | 03:02 PM

Bloomberg — Inflation in Colombia accelerated less than expected in February, but prices still saw their sharpest hike in 24 years, and which is bittersweet news for policymakers.

The consumer price index rose 13.28% in February from a year earlier, the fastest increase since 1999, the country’s statistics agency DANE said Saturday. The result was below the 13.36% median forecasts of 18 economists in a Bloomberg survey, however.

February prices rose 1.66% from the previous month.

Food prices, restaurants and hotels, household items, and transportation led to the increase. Core prices — an indicator that excludes the most volatile products of the consumer’s basket and that is more affected by monetary policy decisions — rose 10.86% from a year earlier from 10.43% in January.


Colombia is the only major economy in Latin America where price rises have yet to peak. Since 2021, the central bank has raised its benchmark interest rate by 11 percentage points to 12.75%.

Central bank governor Leonardo Villar said in an interview last month that Latin America’s major economies are likely to keep monetary policy tight “for a significant amount of time” after overshooting their inflation targets for years in a row. The bank’s board holds its next monetary policy meeting on March 31.

“External supply shocks on tradable goods and regulated tariffs have started to moderate, but price indexation, accumulated currency depreciation and waning subsidies are limiting the relief on inflation. Increasing costs and price indexation are also putting upward pressure on services tariffs,” Felipe Hernandez, a Latin America economist at Bloomberg, said.


Before Saturday’s data release, economists surveyed by the central bank forecast the key rate would peak at 13.25% by April and would be trimmed to 11% by December.

In an attempt to tame inflation, President Gustavo Petro sought to take control of the regulatory commissions that set prices for utility bills such as electricity. However, a high court overruled that decision this week.