Colombia August inflation forecast to slow from July

Colombia’s consumer prices are forecast to rise 0.11% in August, slowing down from 0.14% increase a month earlier, according to average estimate of analysts surveyed by Reuters.

The range of forecasts among the 36 analysts polled went from no increase in the August consumer price index to as high as to a 0.21% increase.

Colombia’s consumer prices rose 0.14% in July, the government’s statistics agency said last month, slightly above market expectations.

Inflation for all of 2011 was expected at 3.32%, the poll showed, up from the 3.30% forecast in July’s poll, but still within the central bank’s target range of between 2% and 4%.

Those polled saw 2012 inflation at 3.42%, up from 3.37% in the previous poll.

Colombia’s central bank paused its tightening cycle last month after six straight months of interest rate hikes, citing concerns over turbulence in global financial markets and its possible impact on economic growth.

Colombia has grappled with the dilemma of whether to raise rates to combat inflation. Higher rates have made their assets more attractive, stoked their domestic currencies and made exports less competitive.

A central bank poll of 39 analysts issued last month forecast Colombia’s consumer prices rising 0.13% in August.

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