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Although the first signs of reactivation began to be seen in the Consumer Price Index (CPI) for October, the data for that month entered negative territory, driven mainly by the fall in tuition prices in the education sector.
(Read: End of reliefs to public services explained September inflation)
That was pointed out yesterday by Juan Daniel Oviedo, director of Dane, in the presentation of the results, in which they showed that the monthly CPI for said month was -0.06% and the annual one, 1.75%.
(Read: ‘Until 2022 GDP will be at the same level as in 2019’
)
For the monthly result, this was below the expectations of the analysts consulted by the Banco de la República in its monthly survey, as they had said that the minimum would be 0.06% and the maximum 0.25%. The figure is the lowest since 2013. Regarding the annual result, this was within what was projected, since they calculated that it could be at a minimum of 1.5% and a maximum of 2.28%.
“This is an inflation that was characterized by reactivation, because we saw that transportation and restaurants and hotels had rises during the month,” Oviedo said.
Precisely, while the monthly variation of transport, restaurants showed an increase of 0.9% and 0.23%, respectively. And that contrasts with the education sector, which had a 2.48% drop in prices, mainly explained by undergraduate, technical, technological and postgraduate enrollments, according to Dane.
If you look at cities, Ibagué had the biggest price drop, with 44.2%, followed by Pasto, with 32.1%, ‘other urban areas’, with 22.6%, and Medellín, with 20.4%.
As Oviedo explained, although in recent months this drop was also seen due to the university enrollment stage, some of these even extended until October, which had an impact on the indicator.
“If we had not had the contribution that education made to the IPC we could have fulfilled the expectations of the analysts,” added the director of Dane. On the other hand, another point that stands out is the increase in the prices of transport and restaurants and hotels, which indicate the first impacts that the reactivation is having in the worst hit sectors.
In third place, the sector that contributed the most to the inflation result in October were alcoholic beverages and tobacco, health and recreation and culture.
In the annual variation, the sectors that contributed the most to the increase in prices were health, which had an annual variation of 5.09%, followed by food and non-alcoholic beverages (3.54%) and alcoholic beverages and tobacco (3, 51%). And the one with the greatest contraction was education, with -4.03%.
For Sergio Olarte, chief economist at Scotiabank Colpatria, “annual inflation is the lowest since 1955, in line with the economic crisis.”
