Colombia | Inflation remained at 5.2% for the third consecutive month

Summary

Monthly inflation in January was 0.94%, exceeding analysts' expectations (0.82% projected in the Central Bank of Colombia’s survey). As a result, the annual variation remained stable for the third consecutive month at approximately 5.22%.

Key points

• Key points:
• Food inflation recorded a monthly variation above the historical pre-pandemic average, bringing the annual rate to 4.5%, which is 118 basis points (bps) higher than the figure recorded at the end of 2024. Part of this increase is associated with base effects, as January 2024 had registered a low monthly variation.
• Core inflation (excluding food) continued to decline in annual terms, reaching 5.4%, 26 bps below December's figure. Among its components, the most significant adjustment came from administered prices items basket, which posted an annual variation of 6.6%, decreasing by 67 bps compared to December.
• The services basket registered a moderate decline, with its annual variation standing at 6.8%, just 18 bps below December's level. Within this basket, some downward base effects, along with deflationary pressures in subcategories such as airline tickets and cinemas, offset increases in rents and subcategories with a higher degree of indexation to the minimum wage
• The goods basket remained stable compared to the year-end 2024 figure, with an annual variation of 0.6%. Within this category, upward pressures were observed in subcategories such as beer and pharmaceutical products, which were counterbalanced by downward pressures in items like mobile phone equipment.
• At BBVA Research, we expect inflation to moderate gradually throughout 2025. The effects of indexation, stemming from both end-2024 inflation and the increase in the minimum wage, will be more pronounced in the early months of the year, with a faster disinflationary trend expected toward the last quarter of 2025.

Geographies

Topics

Tags