Colombia’s Inflation Rate YoY: November 2025 Update and Macro Outlook
Table of Contents
The latest inflation data for Colombia (CO) reveals a year-on-year (YoY) increase to 5.51% in November 2025, according to the Sigmanomics database. This figure exceeds the market estimate of 5.45% and marks a rise from October’s 5.18%. The inflation rate has been trending upward since July, reversing a mid-year dip below 5%. This persistent inflation above the central bank’s target range signals ongoing price pressures in the economy.
Drivers this month
- Food prices contributed approximately 0.22 percentage points (pp) to the inflation increase.
- Energy costs rose sharply, adding 0.15 pp amid global oil price volatility.
- Services inflation remained steady, contributing 0.10 pp.
- Used vehicle prices moderated, subtracting 0.03 pp.
Policy pulse
At 5.51%, inflation remains above Colombia’s central bank target of 3% ±1 pp. This persistent overshoot keeps monetary policy on alert, with the Banco de la República likely to maintain or tighten interest rates further to anchor inflation expectations.
Market lens
Immediate reaction: The Colombian peso (COP) depreciated 0.40% against the US dollar within the first hour after the release, reflecting concerns over sustained inflation. Sovereign bond yields edged up by 5 basis points on the 2-year tenor, signaling modest repricing of monetary tightening risks.
Colombia’s inflation trajectory must be viewed alongside core macroeconomic indicators. GDP growth for Q3 2025 slowed to 2.10% YoY, down from 2.80% in Q2, indicating cooling demand. Unemployment remains elevated at 11.30%, limiting wage-driven inflation pressures but sustaining cost-push dynamics.
Monetary Policy & Financial Conditions
The Banco de la República has incrementally raised the policy rate by 75 basis points since June 2025, now at 7.25%. Financial conditions have tightened, with credit growth slowing to 4.50% YoY. Inflation expectations for 2026 hover around 4.20%, above the target, suggesting persistent price pressures.
Fiscal Policy & Government Budget
Fiscal policy remains moderately expansionary, with the government running a deficit of 3.80% of GDP in 2025. Increased social spending and infrastructure investments support growth but risk fueling demand-side inflation if unchecked.
External Shocks & Geopolitical Risks
Global commodity price volatility, especially in oil and food, continues to impact Colombia’s import prices. Geopolitical tensions in Latin America and supply chain disruptions exacerbate inflationary pressures, complicating policy responses.
Drivers this month
- Food inflation accelerated to 7.10% YoY, driven by higher vegetable and meat prices.
- Energy inflation surged to 9.40% YoY amid rising global oil prices.
- Services inflation remained stable at 3.80% YoY.
This chart highlights Colombia’s inflation trending upward, reversing a two-month decline. The sustained rise signals persistent cost pressures, likely to influence monetary policy and market expectations in the near term.
Market lens
Immediate reaction: The COP/USD exchange rate weakened by 0.40%, while the 2-year government bond yield increased by 5 basis points, reflecting market anticipation of further monetary tightening.
Looking ahead, Colombia’s inflation path faces multiple scenarios shaped by domestic and external factors. The baseline forecast projects inflation moderating to 4.80% by mid-2026 as monetary policy effects materialize and supply constraints ease.
Bullish scenario (20% probability)
- Global commodity prices stabilize or decline.
- Supply chain bottlenecks resolve faster than expected.
- Monetary tightening successfully anchors inflation expectations.
- Inflation falls below 4% by Q3 2026.
Base scenario (55% probability)
- Gradual easing of supply pressures.
- Moderate fiscal stimulus continues.
- Inflation declines slowly but remains above target through 2026.
- Policy rate steady or modestly increased.
Bearish scenario (25% probability)
- Commodity prices surge due to geopolitical tensions.
- Fiscal expansion intensifies inflationary pressures.
- Monetary policy lags, causing inflation expectations to de-anchor.
- Inflation exceeds 6% into late 2026.
Colombia’s inflation rate at 5.51% YoY underscores persistent price pressures amid complex macroeconomic dynamics. The interplay of monetary tightening, fiscal policy, and external shocks will shape the inflation trajectory. Policymakers face a delicate balance between curbing inflation and supporting growth. Financial markets remain cautious, pricing in moderate tightening risks. Structural factors such as supply chain resilience and commodity dependence will influence long-run inflation trends. Vigilance and adaptive policy responses will be critical to maintaining macroeconomic stability.
Key Markets Likely to React to Inflation Rate YoY
Colombia’s inflation data typically influences currency, bond, and equity markets sensitive to inflation and monetary policy shifts. The following tradable symbols historically track inflation-driven market moves and provide insight into Colombia’s economic outlook.
- COPUSD – The Colombian peso’s exchange rate against the US dollar reacts directly to inflation surprises and monetary policy expectations.
- ECOPETROL – Colombia’s largest oil company, sensitive to energy price-driven inflation and economic growth.
- BVC – The Colombian stock exchange index, reflecting broader economic sentiment and inflation impact on corporate earnings.
- BTCUSD – Bitcoin, often viewed as an inflation hedge, can provide alternative market sentiment signals.
- USDCOP – The inverse of COPUSD, also sensitive to inflation and capital flows.
Inflation Rate vs. COPUSD Exchange Rate Since 2020
Since 2020, Colombia’s inflation rate and the COPUSD exchange rate have shown a correlated pattern. Periods of rising inflation often coincide with COP depreciation, reflecting market concerns over purchasing power and monetary policy. For example, inflation spikes in 2021 and 2025 aligned with COP weakening by 5-7%. This relationship underscores the importance of inflation management for currency stability.
FAQs
- What is the current Inflation Rate YoY for Colombia?
- The latest inflation rate for Colombia is 5.51% YoY as of November 2025, exceeding market expectations.
- How does the Inflation Rate YoY impact Colombia’s monetary policy?
- Higher inflation above target prompts the central bank to consider tightening monetary policy to anchor expectations and control price rises.
- What are the main drivers of Colombia’s inflation in 2025?
- Key drivers include rising food and energy prices, supply chain disruptions, and fiscal stimulus effects.
Takeaway: Colombia’s inflation remains elevated and persistent, requiring vigilant monetary policy and structural reforms to ensure long-term price stability and economic resilience.
COPUSD – Colombian peso vs. US dollar, sensitive to inflation and monetary policy shifts.
ECOPETROL – Colombia’s major oil company, linked to energy-driven inflation.
BVC – Colombian stock market index, reflecting economic and inflation sentiment.
BTCUSD – Bitcoin, an alternative inflation hedge and market sentiment barometer.
USDCOP – US dollar vs. Colombian peso, inversely related to COPUSD.
Colombia’s inflation rate rose to a 5.51% YoY in November 2025, up from 5.18% in October and above the 12-month average of 5.07%. This marks the highest reading since March 2025, reflecting renewed upward momentum after a summer lull.
The monthly inflation trend shows a steady climb since July’s 4.82%, with notable acceleration in food and energy components. The core inflation measure, excluding volatile items, also edged higher to 4.30% YoY, underscoring broad-based price pressures.