Colombia faces weakening case for cuts

Consumer prices rose 7.16% in May from a year earlier. — Bloomberg

BOGOTA: Colombian inflation stopped slowing in May for the first time in more than a year, potentially weakening the case for the central bank to heed the government’s calls for faster interest rate cuts.

Consumer prices rose 7.16% in May from a year earlier, the statistics agency said, a pace that was unchanged from the previous month and in line with expectations.

One gauge of annual core inflation closely followed by policymakers slowed to 7.83%. Prices rose 0.43% from April.

President Gustavo Petro, Finance Minister Ricardo Bonilla and some of the nation’s biggest financiers have all urged the central bank to speed up monetary easing to revive economic growth.

But policymakers have so far been cautious for fear that inflation won’t slow to its target fast enough. Colombia seeks inflation of 3%.

The peso has weakened 3% this month amid fears that the government won’t meet its financial targets, potentially adding to inflationary pressures.

Policymakers have cut their key interest rate by 1.5 percentage points since December. — Bloomberg

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