Colombia | November inflation stood at 5.2%, in line with expectations

In November, monthly inflation was 0.27%, with an annual rate of 5.20%, consistent with our expectations and closely aligned with market analysts’ projections, which, according to the Central Bank of Colombia's survey, anticipated a monthly variation of 0.21%. This result is 21 basis points below the previous month's figure

Key points

• Key points:
• Food inflation stood at 2.34%, increasing by 59 basis points (bps) compared to October's figure. This result was mainly driven by increases in inflation within the processed goods basket and base effects in both this category and the perishables sub-basket. Despite the rise in the annual variation of food inflation, the monthly variation remains moderate.
• Core inflation (excluding food) accelerated its decline in November, reaching an annual variation of 5.88%, 41 bps below the previous month’s level. The adjustment was mainly driven by a reduction in the administered prices basket, whose annual variation dropped from 9.50% in October to 7.59% in November, a decrease of 190 bps. This outcome was largely explained by base effects in subcategories such as fuels and electricity, which more than offset upward pressures from the gas subcategory.
• The services basket continued to show some rigidity, with its annual variation declining by just 6 bps to 7.28% in November. Within this basket, subcategories such as rents, tourist packages, dining out, and cinemas and theaters were the primary sources of upward pressure.
• The goods basket, on the other hand, recorded its first increase in annual variation since June 2023. The annual variation rose by 20 bps, from 0.42% in October to 0.62% in November. Within this category, subcategories associated with imported factors exerted upward pressure, along with base effects in the vehicles subcategory.
• At BBVA Research, we expect inflation to continue its downward trend in 2024, closing the year at 5.1%. For 2025, we anticipate inflation will further moderate, reaching approximately 3.6%.

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