Bank of the Republic made clear what it expects from inflation in the coming years, amid uncertainty
The cost of living continues to put strong pressure on household budgets. Photo: Image generated with artificial intelligence.
TL;DR
- Colombia's inflation convergence towards the target will be slower than initially predicted.
- The 2027 inflation target is no longer considered achievable due to a significant rise in inflation expectations.
- Inflation expectations are expected to remain elevated throughout 2026 and 2027.
- New projections suggest inflation could close 2026 around 6.3%, descending in 2027 but not reaching the target.
- The Bank of the Republic raised its interest rate by 100 basis points to 10.25% in January.
- Unfavorable inflation data and minimum wage increases contributed to an abrupt change in expectations.
- Demand has been growing faster than productive capacity since mid-2024, intensifying inflationary pressures.
- A firm monetary policy stance is deemed necessary to anchor expectations and consolidate economic adjustment.