Clombia | October inflation surprised on the downside and stands at 5.4%

In October, monthly inflation was -0.13% and annual inflation was 5.41%, below market analysts' expectations, according to Banco de la República's survey (0.17%). With this, the result is 40 bps below the previous month's figure.

Key points

• Key points:
• Food inflation played a leading role in this month's reduction, registering an annual change of 1.75%, down 98 basis points from the previous month's figure. Within this basket, the downward adjustment was mainly due to a reduction in perishable inflation, which reached a negative annual change (-0.40%).
• Non-food inflation also registered a moderation in October, with an annual change of 6.29%, maintaining the pace of reduction of the previous month by decreasing by 26 bps. Within it, the largest reduction came from the administered prices basket, which reached an annual change of 9.5%, decreasing by 66 bps compared to the previous month's figure. The result was mainly explained by the negative monthly variation of the electricity subclass (-2.25%) and the reduction in the price of gas.
• The basket of goods presented an annual change of 0.42%, decreasing by 18 bps from the previous month and consolidating as the sub-basket with the lowest CPI inflation. The downward adjustment is mainly explained by price reductions in sub-baskets associated with recreation and communication.
• The basket of services reached an annual change of 7.34%, decreasing by 14 bps from the previous month's figure. This reduction was largely associated with base effects, and was favoured by the moderation in pressures from meals away from home.
• BBVA Research expects inflation to continue to fall in 2024. Although food inflation will increase during the last two months of the year, it will reach a moderate level. Meanwhile, non-food inflation will remain down, helped by base effects and lower demand for services.

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