Colombian inflation will likely end 2009 below 4%, which is much below
the official Central Bank’s target range, Jose Dario Uribe, the bank’s
chairman, said Wednesday.
“There is a good probability that (inflation) may end below 4%,”
Uribe said on a conference held in Bogota. Uribe’s previous estimate
was 4.5%.
The Colombian Central Bank’s official inflation target range for
this year is between 4.5% and 5.5%. The 12-month inflation in the
period through June, the latest data available, stood at 3.81%.
The inflation rate ended 2008 at 7.67%, well above the bank’s target for that year.
The country’s consumer price index for July likely increased a
median 0.05%, according to a Dow Jones Newswires survey of nine
analysts. The estimate compares with an increase of 0.48% in the same
month last year.
Inflation has slowed down sharply so far this year as the economic contraction contained pressure on prices.
The Central Bank has taken advantage of the slowing price increases
to cut its key interest rate by 5.5 percentage points since December to
4.5% in a bid to stimulate the country’s economy.
With such a low inflation, the central bank may cut its rate further in the near future.
“We believe the central bank could cut its rate once more to leave
it at 4.25% either in September or October,” said Daniel Velandia, head
of research at local brokerage Ultrabursatiles.