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Colombia's consumer prices could have fallen slightly in June, analysts say

Published 07/01/2021, 11:50 AM
Updated 07/01/2021, 11:56 AM
© Reuters. FILE PHOTO: People wearing face masks shop in the commercial sector of San Victorino during the Christmas sales season as the coronavirus disease (COVID-19) outbreak continues in Bogota, Colombia December 5, 2020. REUTERS/Luisa Gonzalez
CIB
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By Nelson Bocanegra

BOGOTA (Reuters) - Consumer prices in Colombia could have fallen 0.08% in June, mostly due to food supplies returning to normal following a long-running wave of protests and blockades, a Reuters poll revealed on Thursday.

Estimates from 14 analysts fluctuated between a fall in prices of 0.28% and an increase of 0.21%.

If the poll's median estimate is achieved, it will contrast with Colombia's 1% increase in inflation in May, when consumer prices were affected by national protests which saw highways blocked across the country, affecting centers of production and international trade.

"Our estimate takes into account the recovery in domestic supply, which would lead to a correction in prices," bank Bancolombia (NYSE:CIB) said in a statement.

"This could be partially offset by the effect of the exchange rate on some imported foods and the evolution of international prices for goods such as corn and soybeans," it added.

The government's DANE statistics agency is expected to publish the monthly inflation figures on July 3.

If the median forecast is reached, inflation for the last 12 months will reach 3.61%, higher than the 3.35% as of May, and above the central bank's long-term target of 3%.

Furthermore, estimates for annual inflation in 2021 have risen to 3.72%, up from 3.30% in last month's poll.

© Reuters. FILE PHOTO: People wearing face masks shop in the commercial sector of San Victorino during the Christmas sales season as the coronavirus disease (COVID-19) outbreak continues in Bogota, Colombia December 5, 2020. REUTERS/Luisa Gonzalez

In a similar vein, analysts now forecast inflation to close 2022 at 3.10%, up from estimates of 3% in the previous survey.

Low inflation has been one of the central bank's chief reasons for keeping its benchmark interest rate stable at a historic low of 1.75% over the last nine months as it seeks to support economic recovery.

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