Colombian economists warn that July’s easing in inflation could be temporary, as higher labour costs, domestic demand, and climate-related factors threaten to push prices higher again in the coming months, with full recovery expected only in 2027.
Economists in Colombia are warning that July’s easing in inflation may not last, with several forecasters expecting prices to firm again in the months ahead as higher labour costs, stronger domestic demand and climate risks feed through to the economy. El Nuevo Siglo reported that one analyst sees the recent slowdown as temporary and still expects inflation to end 2026 at 7.0%.
The latest reading was helped by softer pressure in several categories. According to Anif, food prices and goods were the main surprise on the downside, with perishable items easing more than expected. The think tank said food inflation fell sharply from June, while goods inflation slowed as prices for new and used vehicles, baby products and some personal-care electronics cooled. That offset firmer prices in some regulated items, such as electricity and gas, that had been expected to push inflation higher.
Services also lost some momentum. El Nuevo Siglo said annual services inflation fell to 6.96%, helped by lower increases in rents, fixed and mobile communications services and air travel. Even so, wage-linked pressures remain visible, especially in property management fees for apartment buildings. The same report noted that core inflation excluding food and regulated items, a closely watched measure for the central bank, edged down to 5.96%.
The broader outlook remains cautious. Anif said July’s result came in below most analysts’ expectations, which had pointed to a renewed rise towards 6.20%. It also argued that the dip should prove brief, citing the possible return of El Niño, strong domestic demand and the delayed effects of the minimum wage increase, alongside spillovers from the conflict in the Middle East. Separate OECD projections for Colombia suggest inflation will rise in 2026 before gradually easing from early 2027, with high prices and tight monetary conditions weighing on growth and investment.
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