Colombian Inflation Accelerates for the First Time in 15 Months

(Bloomberg) -- Colombian inflation accelerated for the first time in 15 months in a setback for the government which wants faster interest rate cuts to revive economic growth.

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Consumer prices rose 7.18% in June from a year earlier, the statistics agency said Monday, from 7.16% in May. Prices roses 0.32% from a month earlier, slightly higher than the 0.30% median forecast of 25 analysts surveyed by Bloomberg.

One measure of core inflation closely tracked by the central bank, which excludes volatile food prices, slowed to 7.64%% from a year earlier.

The Andean nation has the fastest consumer price rises among major inflation-targeting economies in Latin America. In a four-to-two vote, the central bank cut its key interest rate half a percentage point to 11.25% in June, with finance minister Ricardo Bonilla and another board member in the minority of the monetary policy committee voting for a deeper easing. President Gustavo Petro has repeatedly called on the bank to accelerate the pace of monetary easing.

The minutes of the June meeting showed that the majority of policymakers still see inflation risks, while the minority considers that larger rate cuts are essential to the recovery of investment and bringing growth closer to its potential in the coming years. The Colombian peso has lost 2.8% over the past month, the most among emerging market peers, further complicating the inflation outlook.

Colombia targets annual inflation of 3%, plus or minus one percentage point. Policymakers meet again on July 31 to decide on interest rates.

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