Colombia: Food-led relief, services remain sticky

Research evidence excerpt

J P M O R G A N

Latin America Economic Research

11 August 2026

Colombia

Food-led relief, services remain sticky

July CPI printed slightly below our below-consensus forecast, with

headline easing to 6.03%oya on food-driven downside surprise

Economic and Policy Research

Underlying inflation was broadly in line with our scenario: core remains

elevated at 5.96%oya with momentum still above target

(1-212) 834-4321

J.P. Morgan Securities LLC

Core services remain the key persistence channel, with momentum still

high

Juan Goldin

We keep year-end headline (core) CPI at 6.5%oya (6.2%oya), with

inflation likely to stay above the target ceiling through next year

El Niño remains the main upside risk, with risks skewed to a stronger

shock

July inflation printed slightly below our below-consensus expectations. Both

headline and core inflation eased marginally on an annual basis, but remain well above

the upper bound of the target range. The downside surprise was fully explained by

food deflation, while underlying inflation dynamics were broadly in line with our

central scenario. In short, underlying inflation, particularly services, continues to look

persistent, pointing to further near-term upside risks and increasingly entrenched

pressures. We maintain our year-end headline inflation forecast at 6.5%oya and

project core inflation at 6.2%oya by then.

We continue to expect inflation to remain above the target ceiling throughout next year

unless both fiscal and income policies become consistent with the disinflation

process. We are aligned with BanRep Staff in highlighting that risks remain skewed

to the upside, largely due to the expected impact of a severe El Niño event in 4Q26 that

extends into 1H27. In this scenario, El Niño would lift both food and energy inflation

and reinforce indexation dynamics. Our baseline incorporates a cumulative

inflationary impulse of roughly 1.5%-pt, concentrated in that window. That said,

while key data are still to be released ahead of BanRep’s September-end meeting, the

softer July print may provide some near-term relief for the swing director within the

BanRep’s hawkish bloc. Our baseline still has BanRep on hold at least until 2H next

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