Colombian inflation sped up in April, moving further away from the central bank's target and raising the likelihood it may need to resume interest rate hikes after an unexpected pause late last month.
Annual inflation during the month accelerated to 5.68%, the highest rate since 2024, the statistics agency reported Friday, slightly above the median forecast of 5.64% from analysts surveyed by Bloomberg. Consumer prices rose 0.78% from the previous month.
Core inflation, excluding volatile food prices, advanced to 5.44% from 5.39% the previous month.
The central bank targets 3% inflation, plus or minus one percentage point.
On April 30, the South American country's central bank held its benchmark rate unchanged at 11.25%, surprising analysts and traders who anticipated further tightening. The decision comes as outgoing President Gustavo Petro has intensified calls to lower borrowing costs. Most members of the monetary policy committee have resisted his push, while the leftist leader has accused them of undermining the economy ahead of the presidential election later this month.
Minutes from the April meeting showed that the seven-member board unanimously agreed to hold rates steady, partly to avoid any perception of political interference. The decision also came as Finance Minister Germán Ávila, a voting member of the board, threatened to boycott the meeting, which would have prevented any decision from being made.
At the same time, inflation expectations are on the rise following the government's record 23% increase to the minimum wage, reinforcing concerns about accelerating prices. The central bank's latest staff forecasts see inflation ending the year at 6.4% before slowing to 3.7% in 2027.
Despite the unanimous interest rate decision, divisions within the board remain. Four members warned that holding rates steady now could force policymakers to keep monetary policy tighter for longer, given the recent increase in inflation and expectations.
Colombia will hold its presidential election on May 31, with polls showing left-wing Senator Iván Cepeda, a close Petro ally, leading right-wing candidates Abelardo de la Espriella and Paloma Valencia in the first round. A runoff would take place three weeks later if no candidate gets more than 50% of the vote.