What is the delay in further falling inflation in Colombia?

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 What is the delay in further falling inflation in Colombia?  |  Growth |  eCONOMY

The Dane presented, in the night of candles, the latest inflation report in Colombia, showing that in November, its annual change was 10.15%.

Although this data represents a decrease compared to the figures from last year and the previous months, the CPI remains in double figures, and, according to experts, the fall may stop due to factors such as the increase of tolls and the minimum wage, which may create risks. in price increases and indexation that increases inflation.

According to analyst Felipe Campos, Investment and Strategy Manager of Alianza Valores y Fiduciaria, it is likely that the CPI will close the year at 9.50% (the figure for December will be known in January).

Although a fall was observed and the data is likely under double digits, a lag was observed in the fall of 30% due to the price of the dollar, which increased the price of food by 28%, and the CPI of 9%, of 11%, and the rest of 13% due to indexation.

In addition to the dollar, subclasses such as fuel and electricity continue to put upward pressure on this indicator.

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Piedad Urdinola, director of Dane, explained that “the monthly behavior of the CPI is usually explained by the monthly changes in accommodation, water, electricity, gas, and other fuels and transportation divisions.”​

For his part, the former Minister of Finance José Manuel Restrepo pointed out that in order for inflation to progress on a downward path, President Gustavo Petro must be careful with decisions such as the increase in fees and the minimum wage that generate upward cost of living effects.

“You must be very careful with decisions such as rates, minimum wage increases, and soat, which you take or take and may create risks of price increases and indexation that stimulate inflation,” Restrepo wrote in a message to network X, where he defended the management of the previous government after President Petro published a picture in which he showed the evolution of the CPI since the Duque administration.

“President, instead of looking back, look to the future, and you will know that there is something you can do, together with the central bank, to lower prices more quickly,” wrote Restrepo.

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According to President Petro, “currently, inflation is lower than what Duque gave us and will continue to decrease. By raising the minimum wage by 16% and reducing inflation to 10 or 9.5% at the end of the year, the real minimum wage grew by 6 or 6.5%. The end of the year was positive for salaried workers. “