Colombia's Inflation Rate Reaches 0.24% in September 2024: A Detailed Analysis

In September 2024, Colombia reported an inflation rate of 0.24%, a figure that fell short of market expectations. This rate is a significant decrease compared to the 0.54% inflation recorded in September 2023 and a flat 0% in August 2024. The National Statistics Department (DANE) attributes this month's inflation primarily to rising costs in education, restaurants, hotels, health services, and transportation.

From January to September 2024, Colombia has accumulated an inflation rate of 4.58%, a notable decline from the 8.01% inflation rate during the same period in 2023. The median forecast from a Reuters survey had predicted a slightly higher inflation rate of 0.26% for September.

Breaking down the components of September's inflation, education costs surged by 1.93%, while restaurant and hotel prices increased by 0.49%. Health costs rose by 0.29%, and transportation prices saw a 0.24% increase. Food prices, which hold the most significant weight in the inflation calculation, experienced a modest rise of 0.11%. In contrast, recreation and cultural expenses decreased by 0.26%.

Over the past year, the inflation rate in Colombia stood at 5.81% as of September, a decrease from 10.99% in the previous year. Despite this decline, the rate remains above the Central Bank's long-term target of 3%. This reduction in inflation played a crucial role in the Central Bank's decision to cut its benchmark interest rate by 50 basis points at the end of September, bringing it down to 10.25%. This marks a total reduction of 275 basis points since the monetary easing cycle began in December 2023, aimed at bolstering the country's economic recovery.

In August, the Central Bank's technical team slightly adjusted its inflation forecast for the year to 5.7%, up from an earlier estimate of 5.5%. Looking ahead, the bank anticipates inflation will stabilize at around 3% by 2025, reflecting a cautious optimism about the country's economic outlook.