Despite a slowing of growth in annual terms, levels of
economic activity remained high in the first three months of the
year, the team said. It forecast growth in Latin America's
fourth-largest economy of 3% for the first quarter.
Central bank board chief Leonardo Villar said on Friday the
technical team had raised its forecast for economic growth for
the full year 2023 to 1%, from 0.84% previously.
Gross domestic product expanded 7.5% in 2022.
(Reporting by Julia Symmes Cobb; Editing by Edmund Klamann)
(Adds quotes from monetary policy report, details)
BOGOTA, May 2 (Reuters) - Colombia's central bank on
Tuesday raised its outlook for 2023 inflation to 9.5% from 8.7%,
reflecting persistent consumer price growth that has prompted
the bank's board to raise its benchmark interest rate beyond
market expectations.
The outlook, issued by the central bank's technical team,
influences the interest rate decisions adopted by the bank's
seven-member board, which raised borrowing costs to 13.25% on
Friday.
The persistently high prices this year and next are
principally due to increased fuel prices, the team said in its
quarterly monetary policy report. Other factors include a weaker
peso.
"It is predicted that at the end of 2023 total annual
inflation will be around 9.5% and that it will continue its
shrinking tendency during 2024, to situate itself at the end of
that year at a figure close to 3.5%," the report said.
The central bank's long-term inflation target is 3%, but
full-year inflation was 13.12% in 2022.
"The descent of annual consumer inflation has been postponed
until the second quarter of 2023, when it will converge toward
the target rate in the estimate horizon, in part as a result of
accumulated efforts in monetary policy," the report said.
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