Colombia’s 2016 inflation was set at 5.75% by the country’s national Central Bank, missing the government-set target for the year but still down from the inflation recorded in 2015.
At the beginning of 2016, the government had set a goal of between four and five percent inflation for the year.
Despite failing to reach this target, the inflation rate represents roughly a one percentage point decrease compared with the 6.77% inflation recorded in 2015.
According to the report published by the National Statistics Department, DANE, health-related products registered the highest variation in prices at 8.14% thanks to increases in the prices of medicines, contraceptives and private insurance, among other indicators. Health prices had increased by 5.3% in 2015.
The variation in the prices of basic foods such as potatoes, beans, onions, tomatoes and other fresh vegetables and fruits was recorded at 7.22%, down from 10.85% in 2015.
The spending categories recording the lowest variations were apparel at 3.98%; luxury products, including computers, printers, televisions and other electronics at 4.05%; and transportation at 4.47%.
The DANE’s report comes on the heels of a recently approved 7% hike in the country’s minimum wage, and the tax reform raising value added tax (VAT) from 16% to 19%.
While the minimum wage increase covers the overall inflation figure, it doesn’t fully cover the increase in the cost of basic foods or health-related products, especially when taking into account the new VAT reform.