Colombians cut expenses to be able to buy basic necessities

On April 11, the firm Raddar, dedicated to analyzing consumption, revealed that Colombians made sacrifices in the family basket to be able to purchase essential goods such as food, which were affected by inflation.

The report, revealed by RCN Radio, says that 75% of households believe they have been able to buy fewer things in March of this year.

This means that households continue to reduce the amount of money for purchases, due to the high cost of the products they buy on a daily basis.

“Prices strongly influenced the changes, as households had to sacrifice spending on other baskets in order to acquire basic necessities, especially food, which had high inflation and occupied 30% of the total pocket of households,” Raddar explained.

Half of the baskets show positive annual variations despite the high increase in prices. The basket with the highest growth in quarterly spending is Meals Away from Home and the second is entertainment, which in the first quarter of 2022 was driven by a large number of concerts, festivals and other fun events that could not be held last year due to biosafety restrictions.

The text says that during the first three months of 2022, Colombian households spent 219 billion pesos, a figure higher than that recorded in 2021, a quarterly expenditure growth of 12%.

Taking into account inflation in the first three months of the year, which was 8%, real growth in expenditure was 4%.

On the other hand, the value of credit card transactions grew by 40.9 per cent in March, according to Raddar's report. This means a growth of 13% compared to the figures for February.

On the motivations for household spending so far this year, the document revealed that it focused on the need for products, taste for them and quality.

“Another category that undoubtedly reflects the impact of inflation on household pockets is price as a motivator for buying, which during 2022 has been positioned as a weighing factor in the choice of purchase and the channels through which it is made, especially in some baskets,” the report stated.

Finally, the increase in the prices of goods and services nationwide in March, despite having slowed down, being 0.52 per cent higher than the previous month, perhaps has a much more acute impact on the perception of the economic landscape seen by Colombian households.

Thus, during the third month of the year, the variable “cost of living” as the main problem expressed by respondents in the country reflects an escalation that significantly distances itself above the increase in inflation. This is understood if one takes into account that the categories that marked inflation during this month are those that are part of the fixed household expenses, such as food, utilities, some fuels and household items.

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