Former minister José Manuel Restrepo's response to President Gustavo Petro regarding the drop in inflation

Former Finance Minister and current rector of EIA University, José Manuel Restrepo , responded to President Gustavo Petro's comments regarding inflation in Colombia, which has been declining for the third consecutive month. The former minister maintained that the country will not fall into stagflation, as suggested by the president.

According to the National Administrative Department of Statistics (DANE), inflation in June stood at 4.82 percent annually.

Upon hearing the news, President Petro reacted as follows: "Inflation in Colombia is under control. It's fallen below 5% annually. We're at 4.8%, and this month's price increase is barely 0.1%."

And he warned of the risks of possible economic stagnation if the Bank of the Republic does not act more quickly to reduce interest rates: " If the board of directors delays lowering the real interest rate any longer, we could fall into 'stagflation,' falling prices with economic stagnation ."

For Restrepo, the results "are undoubtedly good data that helps Colombia, and I suggest giving a round of applause to the Bank of the Republic, which has achieved this result thanks to the prudent and orderly management of monetary policy, despite the disarray in fiscal policy, which complicates interest rate decisions," he said.

Restrepo added that Colombia is by no means headed toward stagflation. " I suggest reviewing your concepts. Stagflation is economic stagnation and inflation, and here inflation is declining and the economy is trending toward GDP growth (quite the opposite). So, such an argument doesn't hold water ," he stated.

Andi President Bruce MacMaster described the drop in inflation as good news, "amid the complex economic landscape we are experiencing."

Furthermore, he expects this downward trend to continue so that "a monetary policy response" can be seen, that is, a reduction in the Bank of the Republic's interest rate.

In the same month last year, inflation was 7.18 percent, while in May of this year it was 5.05 percent and in April it was 5.16 percent.

DANE also reported that monthly inflation was 0.10 percent in June and 3.74 percent for the year to date.

According to DANE, the largest contributions to the annual increase of 4.82 percent were recorded in the prices of accommodation, water, electricity, gas, food, non-alcoholic beverages, restaurants, hotels, and transportation. In total, they contributed 3.96 percentage points to this increase.

Juan Pablo Penagos Ramirez