(MENAFN – The Rio Times) Colombia’s inflation rate is declining but still exceeds the central bank’s target in October 2024.
The annual inflation rate has fallen to 5.81%, down from a peak of 13% in March 2023, yet it is above the Banco de la República’s 2% to 4% target range.
President Gustavo Petro praises his administration’s anti-inflation policies and advocates for faster interest rate cuts by the central bank.
Economists warn that inflation isn’t fully controlled. The term “anchoring” is now popular, indicating market expectations that inflation will reach the central bank’s target in one to two years. The bank conducts monthly surveys on inflation expectations.
October’s survey shows economists predicting a monthly inflation rate of 0.17%, lowering the annual rate to 5.73%, still above target.
For October 2025, inflation is expected at 4.13%, just above the target limit. Central bank members consider these expectations for monetary policy decisions.
If expectations stabilize within the target range, more aggressive interest rate cuts could happen. Analysts expect the central bank’s rate to drop to 9.6% soon, about 8.75% by the end of 2024, and potentially 6.75% by early 2025.
In 2025, President Petro will appoint two new members to the central bank’s board, possibly shifting towards a more dovish policy. Finance Minister Ricardo Bonilla suggests a “generational renewal” with a preference for appointing women.
As Colombia faces post-pandemic challenges, the direction of inflation and monetary policy remains critical for policymakers and analysts.
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