Colombia’s inflation climbed to 5.68% in April, the steepest rise since 2024, nudging the economy further from the central bank’s 3% target. The statistics agency noted a 0.78% monthly jump, while core prices—excluding food—climbed to 5.44%. Analysts had penciled in 5.64%, so the uptick fuels speculation that the bank may turn again on rates ahead.

On April 30, the Banco de la República held its benchmark rate steady at 11.25%, a surprise to traders who expected further tightening. The decision followed a 23% wage hike and a political tug‑of‑war, with Finance Minister Germán Ávila threatening to boycott the meeting. The board voted unanimously to avoid a perception of political interference.

Inflation expectations have climbed as the wage increase feeds price pressure, pushing the central bank’s staff forecasts to a 6.4% year‑end rate that could fall to 3.7% by 2027. Four board members warned that a pause now may lock the bank into a prolonged tightening cycle, while the remaining members cited political neutrality as priority.

With Colombia’s presidential election looming on May 31, the central bank faces scrutiny from both sides of the aisle. Left‑wing Senator Iván Cepeda, a Petro ally, leads the race, but any policy shift could sway the business climate and investor confidence. The market will now gauge whether the 11.25% rate can be sustained.