Tuesday, September 26, 2023

Inflation, which was uncontrolled and rising rapidly in Colombia, closed 2022 at 13.12%. A fatal blow to citizens’ pockets

Today, January 5, 2023, the National Administrative Office for Statistics announced one of the most important figures in economic matters: the cumulative total inflation for the year 2022.

In December it was 13.12%, once again well above the forecasts of economic analysts. This is the highest inflation in recent years. During the same period of 2021, the country recorded an annual fluctuation of 5.62%.

It should be noted that these figures are decisive for the increase in tariffs, for example for the increase in housing rents in 2023. Law 820 of 2003 specifies in Article 20 that they must increase in accordance with the inflation of the immediately preceding year.

Compared to the month of December 2022 and the same period registered in 2021, the cost of living of Colombians increased to 1.26%, in 2021 the registration was 0.73%.

“Most of the year-to-year variation by spending department is explained by operations in food and non-alcoholic beverages; This has been the trend we have observed throughout the year,” explained Piedad Urdinola, director of Dane.

Food continues to put pressure on family budgets, particularly among citizens who are in the poor and vulnerable strata of the socioeconomic pyramid. As the director explained, the increase in the cost of living was mainly due to the areas of food and non-alcoholic drinks, as well as accommodation, water, electricity and gas. The fluctuations by food and non-alcoholic beverages remained at 27.81%, restaurants and hotels at 18.54%.

According to Dane, the Information and Communications Department recorded an annual fluctuation of 0.25%, which is the lowest annual fluctuation. In December 2022, the largest price increase was recorded in the mobile devices, similar devices and repairs subclass (3.77%). Fixed and mobile communications services and Internet provision showed no annual fluctuations.

How did food prices develop in December 2022?

The largest price increases were recorded in the subclasses of arracacha, yams and other tubers (109.84%), onions (106.81%) and cassava for home consumption (88.08%). The lowest price increases were reported in the raw panela subclasses for personal consumption (4.10%), mineral water (with and without gas) for personal consumption (8.96%) and concentrates for prepared soft drinks (9.03%). .

The food service and hotel sector recorded an annual fluctuation of 18.54%, which is the second highest annual fluctuation.

In December 2022, the largest price increases were recorded in the subcategories of meals prepared away from home for immediate consumption in table and self-service establishments (21.40%), hot drinks (20.81%) and meals in table and self-service establishments (18.70%) .

The lowest price increases were reported in the subcategories of payment for meals in dining rooms (6.90%), expenses in nightclubs (7.67%) and accommodation services in hotels (12.97%).

What happened in the cities?

Among cities, Cúcuta had the largest fluctuation in the year with 16.34%, followed by Sincelejo and Valledupar with 15.83 and 15.53, respectively. Bogotá, Manizales and Medellín recorded the lowest fluctuations at 12.35, 12.61 and 12.75, respectively.

This is undoubtedly a setback for the forecasts of the Minister of Finance, José Antonio Ocampo, who hopes that inflation will fall compared to the records that the country knew on the morning of this Thursday, January 5th. This inflation indicator will be crucial in forecasting the decision that the Bank of the Republic could make on interest rates at the end of the month, and thus determining the economic direction that the country will take in the first quarter of this year.

Nation World News Desk
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