Colombia’s inflation is forecast to have fallen in June due to wider availability of foodstuffs, a Reuters poll revealed on Thursday, as analysts expect the trend to strengthen through the rest of 2023 as demand moderates further, allowing for interest rate stability.
According to the median forecast from 17 analysts, consumer price growth could have hit 0.40% in June, just below the 0.43% recorded in May, and slower than the 0.51% seen in June last year.
Estimates ranged from 0.15% and 0.54%.
The food sector mostly put the brakes on inflationary growth in June “because the supply has improved in some regions of the country and production costs have dropped significantly, added to the fall in the price of the dollar,” David Cubides, director of economic research at the Alianza brokerage, said.
“We see a slide in inflation and interest rates over the next 18 months,” he added.
If the median forecast is met, 12-month inflation through June 30 will hit 12.20%, slower than the 12.36% at the end of May but still far from the central bank’s 3% target.
If inflation in Latin America’s fourth largest economy does slow, it would support market expectations for the central bank to hold its benchmark interest rate steady at 13.25% for the second consecutive month in July.
The bank ended its upward monetary cycle in June when the board voted to hold the rate for the first time since September 2021.
The government’s DANE statistics agency will publish June inflation date on July 10.
Analysts now expect Colombia’s inflation to close 2023 at 8.88%, below the 9% expected at the end of last month. Forecasts for inflation in 2024 held steady at 4.8%.
Source : Nasdaq