POLL-Colombia 2023 inflation seen at 9.43%

Credit: REUTERS/Carlos Eduardo Ramirez

By Nelson Bocanegra

BOGOTA, Dec 28 (Reuters) - Colombia's December inflation could come in at 0.61%, a Reuters poll revealed on Thursday, which would bring the annual figure 9.43%, returning it to single digits which would favor further interest rate cuts from the central bank.

While such a result would be lower than the 13.12% reported for 2022, it would still sit a long way from the central bank's 3% target.

Forecasts from 22 analysts fluctuated between 0.30% and 0.80% growth for consumer prices in the last month of the year.

"It would be good news for Colombia to the extent that it frees the central bank a little and would allow it to eventually make more interest rate cuts in the future," said Wilson Tovar, economic research manager at brokerage Acciones y Valores.

Falling inflation in recent months allowed the central bank to cut its benchmark interest rate by 25 basis points to 13% last week as it tries to boost recovery of Colombia's weakened economy.

The government's DANE statistics agency will publish December inflation data on Jan. 9.

According to analysts, Latin America's fourth-largest economy could see inflation of 5.50% in 2024 and 3.80% at the end of 2025.

"With the cooling that we have recently seen in the economy, it is possible that this downward price trend will continue," Tovar added.

However, analysts warned the effect of the El Nino weather phenomenon on electricity prices, as well hikes to diesel prices - a fuel used mainly by cargo vehicles which could impact prices of food and other goods - could exert inflationary pressure.

Price behavior would also be affected by government mandated increases to the minimum wage, which is expected to be announced in the coming days and could put pressure on the prices of some goods and services.

(Reporting by Nelson Bocanegra Writing by Oliver Griffin; Editing by Chizu Nomiyama)

((Oliver.Griffin@thomsonreuters.com; +57 304-583-8931;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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