Colombia inflation likely to slow

Colombia's annual inflation is likely to slow in December and through next year as the economy cools and a tax reform cuts gasoline prices, reducing the cost of some foodstuff and other goods, according to a Reuters poll published on Thursday. The survey of 30 analysts forecast inflation will close the year at 2.65 percent, lower than the 3 percent in last month's poll and below the mid-point of the central bank's annual inflation target range of 2 percent to 4 percent. Inflation in full-year 2011 reached 3.73 percent.
Consumer prices will likely rise 0.30 percent in December compared with 0.42 in the same month last year but swing back up from their decline of 0.14 percent in November. December prices usually increase as consumers spend more during the holiday period. "There's a tendency on the downside in terms of inflation because we are seeing some food items that have gone negative in price, like fruit, root vegetables and plantains and these are making up for the increase in prices of items like meat," said Daniel Velandia, economist at financial entity Correval. Controlled consumer prices - the slowest full year inflation since 2009 - are a key reason the central bank has been able to cut its benchmark interest rate four times this year to spur domestic growth.