Inflation in Colombia is expected to rise 0.20 percent in May, compared with 0.10 percent in the same month last year due to price pressure on foods after heavy rains and flooding, a Reuters poll of 37 analysts showed.
Estimates ranged from 0.01 percent to 0.33 percent, with a median of 0.20 percent and a mode of 0.19 percent.
Consumer prices in the 12 months to May were seen rising by 2.95 percent, compared with 2.84 percent to April.
“The data continues being very good. It could have been under pressure from the effect (of the rains) on some foodstuffs, which have led to an increase in food prices,” said Wilson Tovar, chief economist at Acciones y Valores.
Expectations for full-year 2011 inflation continued to fall to 3.20 percent from 3.35 percent in the last poll, while 2012 inflation estimates rose for the first time in two months to 3.50 percent from 3.47 percent in the last survey.
What to watch
Analysts believe food prices will come down in the second half of the year due to better climatic conditions and the central bank’s rate hikes since February. Most experts say enough crops are warehoused to keep prices stable.
Inflation expectations are part of the reason the central bank has increased its benchmark interest rate by 100 basis points to 4 percent since February.
Estimates for the rise in consumer prices for 2012 have edged up due to the transmission effect from better economic growth for this year and next. The government sees economic expansion of more than 5 percent in 2011.
Market impact
Markets are closed on Saturday, but the data could move them next week. Lower-than-expected consumer prices could see yields on peso-denominated TES bonds fall, while higher-than-forecast inflation would pressure bond prices downward.
