Inflation is expected to resume its downward trend in May, although with disparities

This week begins with the market eagerly awaiting the inflation rate in Colombia for May, especially after the surprises this indicator delivered last month. While they came as a cold shower, they did not undermine confidence , as reflected in analysts' predictions that it will fall again.

In all of this, the first thing to note is that previous market data shows that this slowdown would not be even across the entire household basket. While foods such as potatoes, fresh fruit, and some meats eased the burden on wallets, other agricultural and mining products continue to exert significant pressure on the cost of living.

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Currently, the Consumer Price Index (CPI), a key indicator for measuring the price of goods and services, stands at 5.16%, a figure that marks an upturn after the monthly variation in April of 0.66%, and a reminder that disinflation is not a linear process, and that, in Colombia's case, it still faces persistent challenges.

Producer prices

In anticipation of the upcoming report, DANE revealed the consolidated producer price index, which measures the variation in prices of domestically produced goods before they reach the consumer. This index fell 1.15% monthly in May, its largest decline so far this year.

It is worth noting that this figure represents a significant turnaround compared to April, when it had risen by 0.14%, and also compared to the cumulative figure for 2025, which is now negative (-1.11%), driven mainly by sharp declines in agricultural products such as potatoes (-19.76%), pome and stone fruits (-17.09%) and poultry meat (-1.07%), as well as by the decline in crude oils (-4.26%).

According to the statistical authority, the agricultural sector registered a 3% contraction in the PPI, mining fell 3.69%, and industry remained virtually stable (-0.01%). Overall, these figures reflect a slowdown in production costs that could begin to be passed on to the final consumer in the coming months.

Meanwhile, a report by Bancolombia's Economic Research based on data from Servinformación, a company that monitors prices in neighborhood stores and convenience stores, also predicts a moderation in food inflation.

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According to this study, food inflation in May was 0.6% monthly, representing an annual increase of 4.67%. The researchers noted that meat prices showed a mixed performance, with beef rising 0.65%, pork falling 1.34%, and chicken falling 1.07%.

Likewise, the trend in fruits and vegetables was mostly downward, with potatoes (-16%) and fresh fruits (-7.6%) again standing out; this is in line with the DANE report and adds evidence that reaffirms the favorable data to be expected regarding the cost of living this time around.

Moderate increases were also observed in products such as plantains (3.1%), onions (1.8%), and some processed products, which are still rising, but at a slower pace: +0.54% monthly. They also indicated that one of the factors helping to contain inflation in agricultural products is the weather. Further explaining this last point, the Bancolombia report predicts continued rainfall for the remainder of 2025 and the first quarter of 2026, associated with a weak phase of the La Niña phenomenon, a climate pattern that favors production, supply, and price stability in the agricultural sector.

"This climate context is especially relevant for Colombia, where climate-related supply shocks have been one of the main sources of inflationary volatility over the past two years," they emphasized.

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Pressure points

However, the outlook is not all encouraging, and it must be acknowledged that some products continue to show significant fluctuations that could maintain localized inflation pressures, especially in rural areas or regions with a high dependence on specific foods.

Among them, coffee stands out, with producer prices rising 4.25% in May , a cumulative year-over-year increase of more than 72%, according to DANE. This trend has an indirect impact on derived products and rural income, but could also generate inflationary contagion if sustained over time.

Similarly, raw gold prices registered a monthly increase of 2.8% and an annual increase of 44.8%. Although it does not directly affect consumer inflation, it reflects tensions in international markets that could alter the exchange rate and, consequently, the prices of imported products.

Meanwhile, petroleum oil prices fell sharply in May, but remain relatively volatile. It's important to remember that their impact is reflected in fuel, transportation, and industrial costs, making this a factor worth monitoring.

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While all indicators point to a moderation in inflation in May, the decline will not be uniform, as some CPI items, such as housing, education, health, and services, do not respond directly to the dynamics of food and fuel, and their behavior could keep headline inflation above 5%.

Finally, according to the Bank of the Republic's Economic Expectations Survey , conducted between May 9 and 13, analysts project that monthly inflation for May would have been 0.38%, with an expected annual inflation of 4.79%. Therefore, if this figure is confirmed, it would mark a return to the deflationary path after the unexpected spike in April, although still far from the 3% target set by the Bank for the medium term.

Thus, producer and retail prices are showing signs of cooling, especially for fresh foods. However, sectoral disparities, the performance of processed foods, and the persistently high prices for key products like coffee are a reminder that inflation in Colombia has not yet been completely tamed.

This is why the data released by DANE this Monday will be key to confirming whether the country is returning to the expected path or, on the contrary, if disinflation remains as uneven as it is uncertain, which would increase pressure in these times of fiscal uncertainty.