The president of the Colombian American Chamber of Commerce, AmCham Colombia, María Claudia Lacouture, warned that if action is not taken quickly, the effects of inflation on the economy and employment will be unpredictable. He called for coordinated work between the Government and the private sector.
AmCham Colombia asked the national government to prioritize measures to combat the high inflation that the country is experiencing, above the reforms announced to be processed in the Legislature, warning that if swift and forceful actions are not adopted, the crisis will have high-impact effects. unpredictable impact and consequences.
María Claudia Lacouture, president of AmCham Colombia, affirmed that “the cost of food and public services represent a good part of the expenses of families that have not been able to stabilize savings since the pandemicwith the aggravating circumstance that the restrictive measures of the Bank of the Republic, in addition to making money more expensive, discourage banking formality and empower the ‘drop by drop’”.
He added that “inflation deserves more attention than all the reforms announced and those that are on the table, it requires quick action, which allows a multi-level strategy to be implemented and not wait for the economy and prices to simply contract.” because people stop buying because they don’t have enough money”.
In this sense, “from AmCham Colombia we call for articulation of the Government with Congress and the private sector to have an agreement that contributes to keeping prices under control without affecting employment or economic growth.”
According to information from the National Administrative Department of Statistics (DANE), inflation in 2022 in Colombia was 13.12%, compared to 5.62% in 2021.being food and non-alcoholic beverages the ones that most boosted the growth of the CPI.
Although the high prices have an important international component derived from the war between Russia and Ukraine, as well as the high costs of imported inputs for the national industry, this condition worsens with the devaluation of the peso, the forecast of droughts in the coming months and the consequences of landslides caused by heavy rains in recent weeks, which make transportation more expensive and hinder the distribution of food and other products.
In the coming days, the Board of Directors of the Banco de la República will meet to analyze the scenario and, according to experts, a new rise in interest rates is expected. In this regard, Lacouture pointed out that “raising interest rates in such an informal economy has generated more burden than solution and the measures adopted last year to reduce to zero, for six months, the tariffs on 165 imported goods related to agricultural production They haven’t even felt. If inflation were only lowered with a decree, living in this world would be very cheap”.
On the other hand, several analysts have said that it is urgent that the Government present alternatives such as a subsidy to food producers and try to reduce intermediation. From BBVA Research, for example, they anticipate that the high levels of inflation will continue to be transmitted, especially during the first half of 2023, followed “by a moderation of the data, which may close the year at close to 8%.”
According to experts, it is also important to acquire good saving habits, as well as learn to control ant expenses. Moderating smaller purchases can be a great relief because these represent one of the largest expenses, which end up affecting financial capacity at the end of the month.
All these expenses, added to the rise in food prices, the item that most marks the cost of living, make it even more difficult to try to survive with historically high inflation and with future increases, at least in the short term.