The Central Bank of Colombia’s Board of Directors maintained a restrictive monetary policy stance after annual headline inflation rose to 6.2% in August. The decision remains consistent with an expected decline in inflation during 2027, although price pressures have broadened and near term inflation expectations have increased. Food and regulated items inflation reached 6.1% and 6.8%, respectively, while services inflation rebounded to 7.2%. Core inflation excluding food and regulated items climbed to a one year high of 6.1%. Analysts raised their December 2026 inflation forecast to 6.8%, while the two year expectation fell to 4.0% and market based expectations remained well above target. Economic signals were mixed. Seasonally adjusted gross domestic product grew 3.4% year on year in the second quarter, but the Economic Monitoring Indicator slowed to 1.1% growth in July as manufacturing contracted 2.3%. Future decisions will depend on the inflation effects of El Niño, the recovery following the earthquake and fiscal policy measures, against somewhat tighter international financial conditions.
Central Bank of Colombia maintains restrictive monetary policy stance as inflation rises to 6.2%
The Central Bank of Colombia maintained a restrictive monetary policy stance as annual inflation rose to 6.2% and core inflation reached a one year high of 6.1%. Future decisions will consider the effects of El Niño, earthquake recovery and fiscal measures, while mixed activity indicators and tighter international financial conditions add uncertainty.