Colombia | October inflation sticks at 3.3% as utilities prices and transport fares rise

Summary

In October inflation registered a monthly growth of 0.16%, topping our forecasts (BBVA: 0.09%, consensus: 0.04%). With this growth, yearly inflation reaches 3.29%, which represents a significant jump compared to the September’s figure (2.86% y/y). In October, the increase in taxis and buses fares, which took place in Bogotá, and the increase in fuel prices that were reflected in higher intercity transportation costs, pushed inflation to the upper. Moreover, as we have been anticipating, gas and energy tariffs continue to grow and in October registered a monthly growth of 1.5% and 0.5%, respectively. Thus, housing (due to utilities) and transportation contributed 0.16 percentage points to CPI inflation of 0,16%. Core inflation (average) accelerated from 2.55% in September to 2.67% in October, due to the high variation in the regulated group (0.57% m/m). However, core inflation continues to be below the target of 3%, and the October’s acceleration was driven mainly by hikes in both utilities tariffs and transportation fares rather than by demand pressures. Thus, it is very likely that Banrep keeps rates on ice at 4.5% at its next meeting.

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