Some Notes on Inflation, Interest Rates and Minimum Wage for the End of the Current Year.

According to the official source, food had an annual inflation rate in september of 2.73%, lower than the total inflation for the month, which was 5.81%, which explains why the inflation of the poor was lower than that of the high incomes, registering 5.55% compared to 5.98%. In addition, inflation in education registered 10.76%, which affects the high incomes more than the poor.

The inflation of the poor is explained by house rentals, which grew in the year by 8.03%, and electricity by 12.62%. High incomes are also affected by fuel for vehicles, 10.82%, and meals on the table, 8.99%.

As mentioned, food prices had a low inflation of 2.73%, which benefits the poor more due to their lower income levels. This result was obtained without major effects from the truckers' strike, which was expected for 4 days of strike do not have an influence due to the recovery of the supply of products in the following days, which lowered prices, although some products did not rise in price during the strike.

It should be noted that within food prices, some prices rise, and others fall. This is the case with potatoes, which continue to have a high price, registering an annual growth of 51.65%, and also others such as fruits, which rose to 11.3%, carrots 45% and chocolate 50%. But there are others that are falling in price, such as rice -0.67%, corn -15.4%, oil -12.3%, bread -0.5%, yuca -10.2%, bananas -9.3%, eggs -6.7%, tomatoes -40%, onions -19% and wheat -16.8%. Those that are falling in price act as substitutes for those that are rising in the case of the poor.

In the cost of education, which as mentioned affects high incomes more, there is secondary education 13.3%, higher education 8.5% and postgraduate studies 8.8%.

The monetary policy exercised by the Bank of the Republic has two meetings left (out of three) in which they can change rates, which are those of october and december after the results of september, whose inflation, as mentioned, fell to 5.81% after 6.12% in august, a slightly lower performance than expected by analysts.

The expected results for december are inflation below the 5.5% figure projected by analysts before the results for september were known. Now, after the september results were known, the estimates will be close to 5.3%.

Likewise, with the interest rate of the Bank of the Republic before september, they expected it to be 9.25% for december with two decreases of 50 basis points each from the current level of 10.25%. After the september results were known, they expect the rate to be at 9% due to a reduction of 75 basis points in the october meeting and one of 50 basis points in the december meeting.

If inflation reaches 5.3% in december and in november it registers around 5.5% (the month of the calculation of the minimum wage) it is probable that the increase in pensions and other regulated prices such as public services will be at those levels. The increase in the minimum wage will also be the result of inflation, plus the increase in productivity, which is low this year at the beginning of the economic recovery, at 0.5%, for a total of 5.5% plus 0.5% and another point of policy addition, that is, 7%. The country is returning to a single digit (after three years) as it was in the years prior to 2.022.

At the same time, other interest rates continue to decline as a consequence, such as the CDT rate, which from the current average of 9.2% will reach around 7.5% by the end of the year.