Colombia’s Inflation Rate MoM for January 2026 Soars to 1.18%, Upending Market Expectations
Colombia’s monthly inflation rate for January 2026, released on February 7, 2026, jumped to 1.18%, sharply exceeding both the December 2025 reading of 0.27% and the consensus estimate of 0.10%. This marks the highest month-over-month (MoM) inflation print since at least May 2025, raising fresh questions about the durability of disinflation and the near-term policy path.
Table of Contents
Big-Picture Snapshot
Colombia’s January 2026 inflation rate (MoM) printed at 1.18%, a dramatic acceleration from December 2025’s 0.27% and well above the 12-month average of 0.26%. The Sigmanomics database shows this is the steepest monthly increase since May 2025’s 0.66% and nearly quadruple the average pace seen through the second half of 2025. The year-on-year (YoY) comparison also looks stark: January 2025’s MoM inflation was 0.42%, making this year’s reading nearly triple that level.
Drivers this month
- Food and non-alcoholic beverages: Estimated to have contributed 0.45 percentage points, driven by supply chain disruptions and seasonal price pressures.
- Transport: Upward adjustment in regulated fares and fuel costs added an estimated 0.22 pp.
- Housing/utilities: Higher electricity tariffs and rent indexation contributed roughly 0.18 pp.
Policy pulse
With inflation surging far above the Banco de la República’s 3% target (annualized), the January print complicates the central bank’s recent dovish tilt. The sharp MoM jump may delay anticipated rate cuts, especially as core inflation remains sticky.
Market lens
Immediate reaction: COP weakened 0.7% vs. USD, and 2-year TES yields spiked 18 bps in the first hour after the release. The COLCAP equity index fell 1.2% intraday, reflecting concerns over tighter financial conditions and slower monetary easing.
Foundational Indicators
Colombia’s macroeconomic landscape entering 2026 was characterized by moderating headline inflation, resilient domestic demand, and a cautious central bank. The January 2026 inflation shock disrupts this narrative. Key indicators include:
- GDP growth: Q4 2025 GDP expanded by 2.1% YoY, but high-frequency data suggest a slowdown in early 2026.
- Unemployment: December 2025’s rate stood at 10.4%, little changed from prior months.
- Fiscal stance: The government’s 2026 budget targets a 3.8% deficit, with limited room for countercyclical stimulus.
- External sector: The current account deficit narrowed to 3.2% of GDP in 2025, but COP volatility remains a risk.
Policy pulse
The central bank’s last move was a 25 bp rate cut in December 2025, citing progress on disinflation. January’s inflation surge may force a pause or even a hawkish pivot, especially if February data confirm a trend.
Market lens
Breakeven inflation rates rose 35 bps post-release, and forward rate agreements now price in just a 30% chance of a rate cut at the next meeting, down from 70% pre-release.
Chart Dynamics
Drivers this month
- Food inflation: Weather-related supply shocks and higher import costs.
- Transport: Fuel price adjustments and new regulatory fees.
- Utilities: Seasonal tariff resets and pass-through from prior currency weakness.
Policy pulse
The inflation surge puts the central bank’s credibility to the test. With core inflation also trending above target, the likelihood of further easing has diminished sharply.
Market lens
Immediate reaction: COP sold off, and 2-year TES yields jumped, reflecting market skepticism about near-term rate cuts. The inflation-linked bond curve steepened, and breakeven rates moved higher across the curve.
Forward Outlook
Scenario analysis
- Bullish (20%): January’s spike proves transitory, with February-March inflation reverting to 0.2–0.3% MoM as food and energy shocks fade. The central bank resumes cautious easing by Q2 2026.
- Base (60%): Inflation moderates but remains above target (0.4–0.6% MoM) through Q2, forcing the central bank to pause rate cuts and maintain a restrictive stance. Growth slows but avoids recession.
- Bearish (20%): Price pressures persist, with MoM inflation averaging 0.8%+ through H1 2026. The central bank hikes rates, COP weakens further, and financial conditions tighten, risking a sharper slowdown.
Risks and catalysts
- Upside: Further supply shocks, fiscal slippage, or renewed COP depreciation.
- Downside: Faster normalization of food/energy prices, global disinflation, or stronger fiscal discipline.
Policy pulse
Fiscal space is limited, and the government is unlikely to provide significant stimulus. The central bank’s next moves will be closely watched for signs of a hawkish shift.
Market lens
Markets will focus on February inflation data and central bank guidance. Persistent inflation could drive further COP weakness and higher local yields.
Closing Thoughts
Colombia’s January 2026 inflation shock marks a pivotal moment for policymakers and investors. The outsized MoM print upends the recent disinflation narrative and injects fresh uncertainty into the monetary policy outlook. With inflation now running well above target, the central bank faces a delicate balancing act between supporting growth and anchoring expectations. The coming months will be critical in determining whether January’s surge is a one-off or the start of a new inflationary cycle.
Key Markets Likely to React to Inflation Rate MoM
Colombia’s inflation surprises often trigger swift moves in local and global markets. The following tradable symbols are historically sensitive to Colombian inflation data, reflecting direct or indirect exposure to COP rates, sovereign risk, and broader EM sentiment. Each is selected from Sigmanomics’ stock, forex, and crypto market pages for their relevance and liquidity.
- EC – Ecopetrol: Colombia’s flagship oil stock, highly sensitive to inflation-driven COP swings and domestic policy shifts.
- PFBCOLOM – Bancolombia: The country’s largest bank, exposed to local rates and credit conditions.
- USDCOP – USD/COP: The primary FX pair reflecting COP volatility after inflation shocks.
- EURCOP – EUR/COP: Tracks European investor sentiment toward Colombian assets, often moving in tandem with inflation surprises.
- BTCUSD – Bitcoin: Increasingly used as a hedge by local investors during periods of COP instability and inflation volatility.
| Year | Avg. MoM Inflation (%) | USDCOP % Change |
|---|---|---|
| 2020 | 0.23 | +4.1 |
| 2021 | 0.28 | +7.6 |
| 2022 | 0.35 | +10.2 |
| 2023 | 0.29 | -2.8 |
| 2024 | 0.24 | -5.5 |
| 2025 | 0.26 | +2.3 |
| Jan 2026 | 1.18 | +1.1 (mtd) |
Periods of above-average MoM inflation in Colombia have historically coincided with COP depreciation, as reflected in USDCOP spikes. January 2026’s inflation surge is likely to reinforce this pattern, with FX and rates volatility expected to remain elevated.
FAQ
Q: What does Colombia’s January 2026 Inflation Rate MoM reading mean for investors?
A: The 1.18% MoM print signals renewed inflation risks, likely delaying central bank rate cuts and increasing volatility in COP-linked assets.
Q: How does this inflation reading compare to recent history?
A: January’s 1.18% is the highest since May 2025 and more than quadruple the 12-month average, breaking a multi-month disinflation trend.
Q: What are the main risks and opportunities from this data?
A: Risks include tighter financial conditions and further COP weakness; opportunities may arise in inflation-linked bonds and defensive equities.
Bottom line: Colombia’s January 2026 inflation shock is a wake-up call for policymakers and markets, demanding vigilance and nimble positioning in the months ahead.
Sources: Sigmanomics database [1], Colombia DANE [2], Banco de la República [3], Bloomberg [4]
Updated 2/7/26
January 2026’s MoM inflation rate of 1.18% dwarfs December’s 0.27% and the 12-month average of 0.26%. The last six months saw readings of 0.18% (Nov), 0.07% (Dec), and 0.27% (Jan), indicating a sudden and sharp reversal in the disinflation trend. The previous high was May 2025’s 0.66%, making the current print nearly double that figure.
Compared to the same month last year (January 2025: 0.42%), the current spike is even more pronounced. The chart below (not shown) would illustrate a pronounced upward inflection, breaking the prior six-month pattern of subdued increases.