Colombia 12-month inflation seen slowing in September despite truckers’ strike: Reuters poll

1:06 pm Wednesday, October 02nd, 2024

By Nelson Bocanegra

BOGOTA (Reuters) – Colombia’s 12-month inflation is forecast to continue decelerating in September, despite the impact of a truckers’ strike, according to a Reuters poll on Wednesday, while expectations for this year remain stable.

According to the median forecast from 20 analysts, Colombia’s 12-month inflation will reach 5.83% through September, lower than the 6.12% reported through the end of August, but still way above the central bank’s long-term target of 3%.

If the median forecast is met, consumer prices will rise 0.26% in September, similar to the 0.25% in the same month last year, but higher than the 0% registered in August.

Analysts’ estimates ranged from 0.17% to 0.38%.

In September “the education sector is reactivated by the school calendar, while we expect to see moderate inflation in the rest of the sectors,” said Jackeline Pirajan, Scotiabank’s chief economist for Colombia.

She added the effect of the national strike on food prices was visible at the beguiling of the month but “is fading quickly.”

The South American country faced a four-day truckers’ strike during the first week of September in protest of an increase in diesel prices, causing food and fuel shortages in major cities.

The significant inflation slowdown has been the main reason behind the central bank board’s reduction of its interest rate by 275 basis points since its downward cycle began in December 2023.

On Monday, the monetary authority cut the rate by 50 basis points to 10.25%, in a divided vote where three of the seven board members requested a reduction of 75 basis points. The remaining four were inclined to remain more cautious in order to control inflation.

Those polled now expect inflation to end this year at 5.6%, almost unchanged from the 5.61% projected last month, while expectations for the end of 2025 slowed to 3.70%, down from 3.75% in the previous survey.

(Reporting by Nelson Bocanegra; Writing by Aida Pelaez-Fernandez; Editing by Toby Chopra)