Colombia’s inflation was about
in line with market expectations at 0.84 percent last month,
cooling from 1.51 percent in February 2008, the DANE national
statistics agency said on Thursday.
Soaring international food prices fanned inflation of 7.67
percent in 2008, Colombia’s highest rate for eight years, but a
sharp drop in commodities prices and consumer demand have seen
more moderate inflation.
The central bank has slashed 2 percentage points off its
benchmark interest rate since December, making growth a
priority over price rises despite concern the peso’s <COP=RR>
sharp slide against the dollar could raise food costs.
The local currency has fallen 40 percent in the last six
months, increasing the cost of imported foods that weigh
heavily on the Andean nation’s consumer price index.
However, most analysts expect inflation to slow through the
course of the year.
“We project that headline inflation will fall to 5 percent
year-on-year by the end of 2009, with much of the downward
adjustment taking place in the second half of the year,” said
Carola Sandy, who analyzes Latin America at Credit Suisse.
That would fall comfortable within the central bank’s target
range for inflation of between 4.5 percent and 5.5 percent.
A Reuters poll of 36 economists earlier this week gave an
average outlook of 0.8 percent, with forecasts ranging from 0.5
percent to 1.14 percent.
A central bank survey last month among analysts estimated
inflation of 0.89 percent. (Reuters)