Colombia's Inflation Eases in March Amid Economic Challenges

Inflation in Colombia likely eased to 0.58% in March as per analyst predictions. Despite this, annual inflation remains above the Central Bank's target. Monetary policy remains limited due to persistent inflation pressures, but rate cuts may be discussed in upcoming meetings. Official reports will be released soon.

Inflation rates in Colombia are projected to have decreased in March after a steep rise in the year's initial months, fueled by increased minimum wages and gas tariff subsidies, according to a Reuters poll conducted on Monday.

The survey, which included insights from 22 analysts, predicts that March's consumer prices will reach 0.58%, a drop from last March's 0.70% and well below February's 1.14%. Predictions varied between 0.21% and 0.69%.

Should these forecasts prove accurate, Colombia's annual inflation through March is set to hit 5.15%, continuing to exceed the Central Bank's target of 3%. Inflation expectations for the year's end have risen, indicating a likely failure to meet inflation goals for the fifth consecutive year, with expectations climbing to 4.42% from February's 4.22%.

Looking ahead to 2026, inflation projections have increased to 3.61% from the previous forecast of 3.50%. Persistent inflation pressures have limited the Central Bank's monetary policy options, halting interest rate cuts since January and maintaining a rate of 9.50%.

Nonetheless, the majority of analysts from the recent Reuters poll anticipate that the monetary authority will announce a cut in the benchmark interest rate in its meeting later today. Colombia's official March inflation report from the national DANE statistical agency is expected on April 7.

(With inputs from agencies.)