High Inflation in Colombia: Impact on Cost of Living & Economy

2023-07-13 00:07:36

07:28 PM

Undoubtedly, it is good news for the country that the cost of living is falling, that little by little prices are moving away from the maximum experienced last March, when inflation stood at 13.34%. So 12.13% sounds like a snack for the pockets that have been battered following the pandemic.

And it is much more positive that food inflation, which is what hits the poorest families the most, is in negative territory. According to Dane, in June food prices contracted 0.53%, compared to May.

However, inflation in Colombia continues to be “extremely high”, as revealed by the co-directors of the Banco de la República at their last meeting, and it is stated in their minutes. And this because the Issuer’s goal is for the cost of living to be 3% per year, and he is far from that goal.

Furthermore, when compared to other countries in the region, inflation in Colombia is also very high. This, contrasting “with what is observed in advanced countries and in comparable economies in Latin America, in which inflation has been reduced substantially,” the minutes say.

Contrasting with comparable economies in the region, in Peru annual inflation closed at 7.99% during the fifth month. While, in Mexico it reached 5.84%; in Brazil, 3.7% and in Chile, 8.7%.

And when compared to other countries in the world, the situation is not very different. Statista collects the official data from the statistical authorities of each country, and in its list Colombia appears as the 14th economy with the highest inflation on a global scale.

The most worrisome cases are Venezuela, which in the absence of reliable data resorts to those provided by the Venezuelan Finance Observatory, whose inflation reached 430%; It is followed by Zimbabwe, which has not provided data since last October when it reported 339.7%, Lebanon with 260.2% and Argentina with 114.3%. From now on, the countries with double-digit inflation follow, among which is Colombia.

The country will have to continue tightening the screws so that more interest rate increases are not necessary, if it does not want its economy to drown.

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