Tuesday, March 28

Colombia Initiates Plan to Fight Fastest Inflation in Five Years

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(Bloomberg) — Colombia launched a series of measures seeking to curb the fastest inflation in five years, largely from increases in food prices, the nation’s finance minister said.

Minister Jose Manuel Restrepo announced a package of measures after inflation accelerated in January, more than doubling its 3% target. Restrepo spoke alongside the agriculture and transport ministers, among other high-level officials, after a meeting with President Ivan Duque, according to a video from the administration.


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Central bank will continue its process of normalizing monetary policyNation will cut costs of agricultural inputsGovernment will reduce tariffs on agricultural importsGovernment will work with producers to increase food supplyTransport Ministry will seek to improve logistics on main Colombian ports with lower costsGovernment will provide additional credit lines and insurance for food producersOne million additional families will be included in government subsidies

The Andean nation’s inflation rate surged to 6.94% in January, its highest level since September 2016, the national statistics agency said Saturday. That’s more than was forecast by all 18 analysts surveyed by Bloomberg, whose median estimate was 6.39%. Food prices rose 20 % from a year earlier. Prices increased 1.67% from December, the highest monthly rise since 2001.


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Read More: Central Banker Eyes an End to Stimulus for Fast-Growing Colombia

The central bank has raised borrowing costs 2.25 percentage points since September to 4%, and last month surprised analysts with a bigger-than-expected increase as it tries to get on top of surging prices.

Inflation has jumped above target across all major Latin American economies, as well as in other emerging markets and in rich nations, as global demand rebounds before supply chains are fully recovered from the pandemic, and businesses pass on higher global food and energy costs to customers .

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