Prices will start to fall in May, according to the finance minister

2022 began with higher than expected inflation, which Colombians have felt when making a market or purchasing other consumer products. But for the coming months, the forecasts are encouraging, as the price of several goods could begin to fall.

The Minister of Finance, José Manuel Restrepo, explained to the newspaper El Tiempo that, based on the measures taken by the national government, to reduce tariffs on commodities and inputs, the annual inflation figure that caused the increase in commodity prices is expected to begin to fall by the month of May.

The head of portfolio said that this is a global phenomenon, influenced by the economic recovery and war of Russia and Ukraine, which have led to an increase in the price of inputs and commodities such as oil.

In addition, in conversation with Yamit Amad, the head of the economic portfolio assured that the national economy could grow this year by over 5%, based on International Monetary Fund forecasts and be the second fastest growing in the region. Even so, in economic matters, the next government will have to face the uncertainty arising from the pandemic, the war and the public finances that were rearranged to address the pandemic.

However, for this month of April, according to an editorial in the newspaper La República, the figures would not be encouraging and would show a new increase that is already around 15% in the prices of food from the basic household basket, services and fuels.

One of the most notable effects of inflation is seen in the poorest households, who have to buy more expensive products with equal incomes. For that reason, the result can be a reduction in your well-being through a higher cost of living.

This is the effect highlighted by the director of the National Administrative Department of Statistics (DANE), Daniel Oviedo, who in an interview with the newspaper El País pointed out that “the impoverishing effect of this behavior will be very strong in 2022″.

For March, according to figures from the entity, inflation stood at 8.53 per cent and most of it was in basic necessities such as food and services. Oviedo, according to the Caleño media, estimates that by December, although it shows a reduction, the figure would approach 7%.

Fedesarrollo indicates that the country saw annual inflation in March 2022 of 8.53%, a level that has exceeded the Banco de la República's target ranges for six consecutive months, that is, manageable, and “a higher record since July 2016”.

The most affected sector has been food and therefore households, due to the fact that for the same month inflation of 25.4 per cent was achieved, which is historical in national registries and is due to high costs of agricultural inputs and a limited supply of products. As it has been announced that it could happen with flour derived from the conflict in Ukraine.

The study center also agrees, like the Minister of Finance, that for the second quarter of this year, from April to June, inflation will decrease and there is evidence of a reduction due to government and Banco de la República tariff measures. However, according to experts, the latter will have to be maintained in order to stabilize national finances, such as the extension of zero tariffs on inputs and a normalization of interest rates.

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