Tuesday, 02 January 2024 12:17 GMT

Colombia's Inflation Grind: Hard Choices, Slower Relief


(MENAFN- The Rio Times) Colombia just admitted what many shoppers already feel at the checkout: prices are easing, but not fast enough.

The central bank 's staff now sees inflation at 5.1% by end-2025 and 3.6% in 2026-still above the 3% goal. Rates stay high at 9.25% to keep the descent alive.

The roadblock isn't mystery; it's arithmetic. A hefty nationwide wage decision in 2026 could outpace productivity, hard-wiring higher costs. Regulated electricity and gas tariffs are due for resets that pass straight to bills.

And the peso can swing with global nerves, lifting import prices when it wobbles. Add geopolitical shocks and trade frictions, and the“last mile” of disinflation slows.

Yet the economy isn't stalling. Growth is projected near 2.6% in 2025 and 2.9% in 2026, with jobs comparatively firm and consumption still ticking.



The central question is how to protect purchasing power without torching credibility. The current playbook favors steadiness: keep expectations anchored, phase in tariff fixes, and avoid flashy experiments that feel good now but cost more later.

For expats and foreign readers, translate this into actions. If you're borrowing-mortgage, car, or business capex-budget using today's rate, not tomorrow's wish.

Employers should run scenarios for wage and utility outcomes before 2026 contracts land. Households should watch utility notices and service prices, which move fastest when tariffs and wages shift.

Behind the headlines, Colombia is choosing method over spectacle. A measured wage round, predictable utility adjustments, and a reasonably calm peso would push inflation toward target in 2026 without a shock.

That outcome won't grab headlines, but it safeguards savings and invites investment-the kind of quiet win that compounds over time.

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The Rio Times

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