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Colombia's 2025 Inflation Closed At 5.10%-Lower Than Expected, Still A Problem
(MENAFN- The Rio Times) Key Points
Colombia ended 2025 with a headline inflation number that looked reassuring-and a composition that still worries policymakers.
DANE reported consumer inflation of 5.10% year over year in December, easing from 5.20% a year earlier and undershooting the roughly 5.19–5.20% most forecasters expected. Monthly inflation in December was 0.27%.
Housing and utilities were the main engine. The division has a 33.12% weight in the CPI basket and contributed 1.48 percentage points to annual inflation, even though the category's own inflation was 4.76%.
Rent was central: imputed rent rose 5.06% (0.65 points of contribution) and paid rent rose 5.31% (0.49). Other large contributors showed why the slowdown can still feel expensive.
Food and non-alcoholic beverages rose 5.07% and contributed 0.95 points. Restaurants and hotels rose 7.91% and contributed 0.87. Transport rose 5.35% and contributed 0.72. Education rose 7.36% and contributed 0.30.
December's details pointed to familiar year-end frictions. Restaurants and hotels climbed 1.24% in the month, providing 0.14 points of the 0.27% monthly print.
Transport rose 0.41% (0.05 points) as vacation demand lifted fares; intermunicipal transport jumped 6.91%. Recreation and culture rose 1.04% (0.03 points). Tomatoes surged 13.88%, and full tourism packages rose 4.16%.
Some items pulled hard in the opposite direction, masking pressure elsewhere. Coffee and coffee -based products soared 52.07% in 2025 (0.15 points), while potatoes fell 24.61% and mobile phone equipment and repairs dropped 23.65%.
Inflation also varied by city: Bucaramanga (5.78%) and Pereira (5.77%) ran hottest, while Valledupar (3.49%) was among the lowest.
The policy stakes now hinge on 2026's reset. Banco de la República held its policy rate at 9.25% in December with inflation still well above target.
Meanwhile, the government set a 2026 minimum wage increase of 22.7%-to 1.75 million pesos, about $470-by decree after negotiations failed.
That wage shock, combined with Colombia's habit of indexation, risks re-accelerating prices just as the disinflation narrative gains credibility.
Inflation closed 2025 at 5.10%, below forecasts, yet still far from the central bank's 3% target.
Housing-linked costs carried the biggest weight, while restaurants and transport kept services inflation sticky.
A 22.7% minimum-wage hike for 2026 could feed indexation and postpone meaningful rate cuts.
Colombia ended 2025 with a headline inflation number that looked reassuring-and a composition that still worries policymakers.
DANE reported consumer inflation of 5.10% year over year in December, easing from 5.20% a year earlier and undershooting the roughly 5.19–5.20% most forecasters expected. Monthly inflation in December was 0.27%.
Housing and utilities were the main engine. The division has a 33.12% weight in the CPI basket and contributed 1.48 percentage points to annual inflation, even though the category's own inflation was 4.76%.
Rent was central: imputed rent rose 5.06% (0.65 points of contribution) and paid rent rose 5.31% (0.49). Other large contributors showed why the slowdown can still feel expensive.
Food and non-alcoholic beverages rose 5.07% and contributed 0.95 points. Restaurants and hotels rose 7.91% and contributed 0.87. Transport rose 5.35% and contributed 0.72. Education rose 7.36% and contributed 0.30.
December's details pointed to familiar year-end frictions. Restaurants and hotels climbed 1.24% in the month, providing 0.14 points of the 0.27% monthly print.
Transport rose 0.41% (0.05 points) as vacation demand lifted fares; intermunicipal transport jumped 6.91%. Recreation and culture rose 1.04% (0.03 points). Tomatoes surged 13.88%, and full tourism packages rose 4.16%.
Some items pulled hard in the opposite direction, masking pressure elsewhere. Coffee and coffee -based products soared 52.07% in 2025 (0.15 points), while potatoes fell 24.61% and mobile phone equipment and repairs dropped 23.65%.
Inflation also varied by city: Bucaramanga (5.78%) and Pereira (5.77%) ran hottest, while Valledupar (3.49%) was among the lowest.
The policy stakes now hinge on 2026's reset. Banco de la República held its policy rate at 9.25% in December with inflation still well above target.
Meanwhile, the government set a 2026 minimum wage increase of 22.7%-to 1.75 million pesos, about $470-by decree after negotiations failed.
That wage shock, combined with Colombia's habit of indexation, risks re-accelerating prices just as the disinflation narrative gains credibility.
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