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Prices
on upward path.
Consumer prices rose 1.1% in April over March, the fourth consecutive
monthly increase over 1% and well above the average of 0.7% observed in
the last twelve months. As a result, annual inflation increased to
7.9% in April from 7.8% in March. The annual inflation rate
continues to move closer to the Central Bank’s target of 8% for this
year. Rising inflationary pressures were already factored into last
month’s Consensus Forecast and as a result in this month’s publication
panellists again expect the monetary authorities to overshoot the target.
The less favourable inflation outlook is likely to prompt some monetary
tightening this year. As a result the benchmark DTF interest rate is
expected to rise from the current level of 12.7% (7 May).
Export
growth slowing.
The recovery in Colombian economic growth over the last year has been
propelled by a strong expansion in exports, particularly manufactured
exports. Recent trade data foreshadows that the propitious
export-led expansion may be forestalled by the downturn in global demand,
particularly in the United States. In February, exports declined
9.6% over the same month last year. The decline can be attributed to
a 39% decline in traditional exports, as coffee, oil and coal sales were
down 51.7%, 39.2% and 30.1% respectively. Non-traditional export
growth remained in positive territory, registering a 2.0% increase as a
result of strong flower and banana sales. Import growth remained
strong at 26.6%. As a result, the annual trade balance surplus
narrowed from US$ 1.4 billion last month to US$ 1.1 billion this month.
Panellists, however, remain confident that export growth will resume and
the surplus will widen again by the end of the year.
Note:
The above text is an abridged version of the LatinFocus Consensus Forecast
briefing on Colombia. For more details please click here.
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