BOGOTA (Reuters) – Colombia’s inflation in November is forecast to have stepped up a gear compared to the previous month as supply chain issues weigh on local and international prices, an effect forecast to roll into next year, a Reuters’ poll revealed on Monday.
According to a median estimate of 16 analysts, consumer price growth in November is forecast at 0.20%, up from 0.01% in October. Consumer prices contracted 0.15% in the same month in 2020.
Analysts’ forecasts fluctuated between 0.06% and 0.35%.
If inflation rises in line with the median forecast, November’s 12-month consumer price growth will hit 4.94%.
The biggest pressure on inflation is expected to come from food prices, which in turn would impact the hospitality and hotel sectors, while transport and housing will also weigh on consumer prices, the analysts forecast.
A second sales-tax (VAT) free day took place in Colombia during November, which is expected to result in inflation in the telecommunications and fashion sectors falling, according to Itau bank economist David Cubides.
Analysts now expect inflation to hit 4.90%, down from a forecast of 4.97% last month, but still far beyond the central bank’s 3% target.
Consumer prices are expected to grow 3.80% during 2022, up from a forecast of 3.50% in October’s poll.
The central bank previously extended its 3% inflation target to 2022, with a range of between 2% and 4%, as prices rise amid greater-than-expected economic growth.
Colombia’s monetary policy authority has begun a cycle of raising interest rates to combat growing inflation, increasing its benchmark rate by 25 basis points in September and 50 basis points in October, taking the current rate to 2.50%.
Analysts forecast the bank could hike the interest rate to 4.50% by the close of next year.
The government will publish November’s inflation data on Saturday, Dec. 4.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by Bernadette Baum)