Colombia Inflation Unexpectedly Rebounds After Key Fee Pause

(Bloomberg) — Colombia’s inflation unexpectedly accelerated final month after the central financial institution’s Jan. 31 choice to pause its price reducing cycle on concern about renewed value pressures.

Official information launched Friday confirmed client costs rose 5.22% in January from the identical month a yr earlier, above the 5.10% median estimate of economists surveyed by Bloomberg. That’s up from the December studying of a 5.20% year-on-year rise.

Colombia overshot its inflation goal of three%, plus or minus one proportion level, in 2024 for a fourth straight yr.

The financial coverage committee final week unexpectedly held borrowing prices unchanged at 9.5%, halting a collection of rate of interest cuts that began in 2023 as policymakers fret in regards to the worsening fiscal outlook, a big minimal wage hike and tariff threats from US President Donald Trump.

Central financial institution economists are actually forecasting a slower convergence of inflation to focus on and forecast that costs rises will end 2025 at 4%. The just about 10% minimal wage enhance, the acceleration of producer value inflation and the rebound of inflation expectations are difficult policymakers, board members stated on the assembly.

Some economists estimate the financial coverage committee will flip dovish after President Gustavo Petro appointed Laura Moisa and Cesar Giraldo as central financial institution co-directors. The central financial institution subsequent coverage assembly is on the finish of March.

–With help from Rafael Gayol and Andrea Jaramillo.

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