The inflation data (13.28 percent per year) revealed by the National Administrative Department of Statistics (Dane) last Saturday again marked a historical level in this century, although with a particularity, a much better growth rate than it had in previous months, which shows that it would be very close to reaching its highest peak at this juncture for begin its gradual decline to levels between 8.5 and 9 percent at the end of 2023, according to some experts.
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It will not be something immediate, agree those consulted, who see that breaking the real inflationary trend could take a couple more months —until May—, so the second semester will be very different in this matter.
Their confidence in this lies in the new economic circumstances, both international and local, which mean that today the factors that work to put pressure on the cost of the basic basket are different from those that led it to the record levels recorded in recent months.
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Although in the annual inflation data for last February, food continued to have a great weight, contributing 4.4 basic points, while its annual variation was 24.1 percent, it is clear that these are slowing down significantly, they fell 206 basis points compared to January, with perishable products being the protagonists with a decrease of 576 basis points.
“There is still some pressure on certain perishables because of the exchange rate and the weather, but much less than what we were seeing last year when the war between Russia and Ukraine broke out,” he said. Sergio Olarte, Principal Economist at Scotiabank Colpatria.
As recalled, this happens that the cost of fertilizers, a key raw material for agribusiness, will shoot up more than 300 percent from its lowest prices in December 2019 (238.16 dollars per metric ton) at the highest observers. in April of last year ($954), according to JJohn Baffes and Wee Chian Koh, World Bank researchers.
Today the cost of these raw materials has decreased (625 dollars on average), but adjusts at high levels due to availability and demand issues.
This higher cost was added, at the time, to the high freight rates caused by the covid-19 pandemic, placing them at levels of more than 12,000 dollars for 40-ton containers, but today they have returned to around 4,550 dollars on average. .
According to him Valencia Containerized Goods Index (VCFI)indicator that measures the trend and evolution of the cost of transporting containers by sea from the port of Valencia, this has decreased on average close to 11 percent, but for Pacific Latin America the January up to drop was 14.7 percent.
This cost reduction has also been seen, although not in equal proportions, on the side of some cereals that Colombia imports for food production. According to Food and Agriculture Organization of the United Nations (FAO), the cereal price index shows a fall of close to 2 percent until February, the month in which wheat and light corn had increases, 0.3 and 0.1 percent, respectively.
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With this panorama it is clear that «external factors play an increasingly less important role» in the performance of inflation, says Luis Fernando Mejía, director of the center for economic studies Fedesarrollosomething in which Javier Díaz, president of Analdex, a union of Colombian exporters, agrees, for whom freight and logistics no longer pressured as much as they did last year.
the new scenario
Without this pressure from external factors, it is clear that we must look internally at what is preventing inflation in Colombia from changing its trend soon, as has happened in other world economies, such as the United States.
And in this, according to analysts, there is a bit of everything, from the persistence of high consumption, the effects of the rise in gasoline prices and the exchange rate, to serious confidence problems in the country, as said a TIME, on Friday of the previous week, Juan Pablo Córdoba, president of the Colombian Stock Exchange (BVC).
In his opinion, once the external effects of freight, fertilizers and logistics have been overcome, it is necessary to look at the local environment, where the lack of confidence in the country It has meant that the peso is devaluing more than any other currency in the region and this plays a very important role to the extent that, he says, 50 or 70 percent of the basket of goods depends on devaluation.
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«Colombia is devaluing more than other countries in the region due to the noise that has been generated from the other initiatives themselves, the messages from the Government and the confusion about the new economic model that they want to implement, and that is manifesting itself in the rate of change,» insisted the director.
He is not the only one who believes that the change factor is key to changing the direction of inflation.
Olarte, an economist at Scotiabank, points out that imported goods continue to contribute significantly to inflation, especially vehicles and toiletries, while for Mejía, director of Fedesarrollo, there is still an excess demand (high household consumption ), which is the most determining factor, without neglecting the issue of food prices.
The latter, moreover, have been impacted by the gradual adjustment brought about by the prices of gasoline and diesel, which only this year have reached 600 pesos.
«Food has gone down, but I think that the issue of internal transport continues to be a particular variable there due to the increase in the prices of gasoline and diesel, that weighs,» says Díaz, from Analdex, who expects to see a better inflation behavior ahead because the other variables (freight, inputs and logistics) no longer weigh so much.
Optimism for a decline
Despite the rise in inflation in February, the President Gustavo Petro He was confident that this upward trend would break next month and the country would begin to see declines in this indicator of the economy.
“The inflation ceiling has been reached in January and the slowdown has begun. It is very important that food is no longer what marks out inflation. A further decrease in the price increase is possible for the coming month, ”he wrote in his Twitter account. Twitter.
And he added that he hopes that this decrease will be reflected in consumer prices, because otherwise, we could be facing a phenomenon of speculation that will have to be controlled.
Laura Peña, economist at BBVA Research, says that services reflect demand and indexation pressures and accelerate 36 points compared to January. In the first group, meals in table service establishments and fast foods stand out, while in the second, rent and registrations stand out.