According to data from DANE, Colombia’s annual inflation rate stood at 11.43% for August 2023. This represents a decrease of 0.35% compared to the previous month when the index was at 11.78%. With these figures, the monthly variation of the CPI is 0.7%, and the accumulated inflation for the first 8 months of 2023 is 7.4%.
Although inflation in the country continues to decrease, the decline in prices remains slow compared to what was projected. For example, the Central Bank of Colombia expected the August CPI not to exceed 11.15%. However, the government does not see this as a threat to its projection of keeping inflation below double digits by the end of the year.
Costs rising the most: food and transportation
According to the Director of DANE, Piedad Urdinola, in a press conference, four sectors were above the monthly average of 0.70% in August: alcoholic beverages and tobacco (1.14%), food and non-alcoholic beverages (1.13%), recreation and culture (1.02%), and transportation (0.90%).
The rise in food prices is a concern, as it continues to be the sector, excluding alcoholic beverages and tobacco, that contributes the most to the increase in the CPI. However, Piedad Urdinola notes that the trend “is much closer to the patterns of previous years.”
Experts point out that the prices of essential goods were affected by the closure of the Bogotá-Villavicencio road following the August 17 earthquake. This disruption led to a 33% reduction in the supply of food to that region of the country.
Another concerning sector is transportation. Fueled by the increase in gasoline prices due to the government’s decision to end subsidies, this is one of the fastest-growing sectors. It’s worth noting that President Petro’s controversial measure has caused the price of gasoline to jump from 9,180 pesos per gallon to 13,924 pesos in just one year.
Costs rising the least: clothing and communication
Sectors with inflation rates below the average include: water, electricity, gas, and other fuels (0.61%), restaurants and hotels (0.52%), education (0.38%), health (0.28%), furniture and household items (0.27%), clothing and footwear (0.26%), and finally, information and communication (0.04%).
When analyzed by capital cities, the cities with the highest CPI growth are Cúcuta (12.59%) and Sincelejo (12.58%). They are followed by Montería (12.11%), Bogotá (11.67%), and Medellín (11.53%).
On the contrary, the cities with lower inflation rates are: Villavicencio (9.85%), Santa Marta (10.42%), Riohacha (10.65%), and Tunja (10.82%).
The main impact of August’s inflation, unlike previous months, fell on the most vulnerable sectors of the population. The poorest households experienced an increase of up to 0.74% monthly, compared to the 0.66% increase for more affluent families.