dc.audience	Policymakers	eng
dc.audience	Researchers	eng
dc.audience	Teachers	eng
dc.audience	Students	eng
dc.creator	Office of the Deputy Technical Governor
dc.creator	Office for Monetary Policy and Economic Information
dc.creator	Programming and Inflation Department
dc.creator	Inflation Section
dc.creator	Macroeconomic Programming Section
dc.creator	Macroeconomic Modeling Department
dc.creator	Forecasting Section
dc.creator	Models and Capacities Development Section
dc.date.accessioned	2025-05-06T13:45:21Z	eng
dc.date.available	2025-05-06T13:45:21Z	eng
dc.date.created	2025-05-06	eng
dc.description	In March, inflation decreased - although less than anticipated - and remains above the 3% target. Over the next two years, it is expected that inflation will continue to decline, converging gradually toward the target. In March, annual headline inflation stood at 5.1% - slightly above the forecast - due to upward surprises in regulated items such as gas and urban transportation, as well as increases in processed foods. The decline in inflation is largely attributed to the cumulative effects of a still-restrictive monetary policy stance, indexation to lower inflation rates, and the moderation of international prices for certain goods and raw materials. However, inflation remains above 3% due to continued significant price adjustments across all baskets, except for the goods group excluding food and regulated items. Core inflation, which excludes more volatile items such as food and regulated items, continued to decline, falling slightly more than presumed to 4.9% in March. For the remainder of 2025 and into 2026, headline inflation is expected to continue its downward trend amid a recovery in economic activity, albeit with excess productive capacity, price indexation to lower inflation rates, and moderate exchange rate pressures. Under these conditions, inflation is projected to converge to the 3% target by yearend 2026. The inflation forecast remains subject to high uncertainty, particularly due to the behavior of prices for some regulated services and exchange rate dynamics in a context of significant fiscal challenges. This uncertainty has recently increased due to potential impacts stemming from changes in U.S. trade policy. In the first quarter of 2025, economic activity would have recovered more than expected; however, it faces future adverse shocks originating from the external environment. In 2024, the Colombian economy grew by 1.7%, broadly in line with projections. This performance occurred against a backdrop of declining interest rates, lower (though still above-target) inflation, and increased household disposable income. Available information for the first quarter of 2025 indicates stronger-than-expected economic activity, driven by higher growth in private consumption and investment. As a result, GDP is estimated to have grown by 2.5% year-on-year during the quarter. For the remainder of the year, it is anticipated that higher incomes from higher prices of certain agricultural products such as coffee, robust remittance inflows, and strong foreign tourism will bolster economic activity. The latter would be complemented by a gradual recovery in credit amid declining real interest rates and credit risks. However, recent tariff increases in the United States and uncertainty about future trade policy have dampened global economic activity, raised global risk perceptions, and increased the cost of external financing, factors that are expected to negatively affect Colombia’s exports of goods and services. Considering the stronger-than-expected growth in the first quarter and the adverse external shock linked to global trade developments, the economic growth forecast for 2025 remains at 2.6%, while the projection for 2026 has been revised downward to 3.0%. The unemployment rate continues to decline and remains at low levels, while employment has increased significantly, particularly in the non-salaried segment, leading to a rise in the informality rate. The Board of Directors of Banco de la República (JDBR) continues to adopt a cautious approach to monetary policy, consistent with the aim of guiding inflation toward the 3% target and supporting a sustainable recovery in economic activity. At its March meeting, the Board of Directors of Banco de la República (JDBR) opted to lower the monetary policy interest rate to 9.25%, following a decision to keep it unchanged in January. Although inflation has declined, it remains above the target and is subject to significant risks, warranting a cautious approach to interest rate decisions to ensure a sustained convergence of inflation toward the 3% target. Domestic fiscal challenges and external uncertainty pose significant upside risks to Colombia’s external financing costs, exchange rate, and inflation. These factors underscore the need for a prudent monetary policy stance to support the path of inflation to the target and the sustainable recovery of economic activity. Box 1 - De la recuperación al ajuste: dinámica reciente de los sectores productivos en Colombia (only in Spanish) Barbosa-Buitrago, Johanna; Pulido-Mahecha, Karen L. Descargar PDF Box 2 - Evaluación del error de pronóstico macroeconómico para 2024 (only in Spanish) Muñoz-Martínez, Jonathan Alexander; Pérez-Amaya, Julián Mauricio	eng
dc.format.extent	4 páginas : gráficas, tablas	spa
dc.format.mimetype	PDF	spa
dc.identifier.handle	https://hdl.handle.net/20.500.12134/11170	spa
dc.identifier.uri	https://repositorio.banrep.gov.co/handle/20.500.12134/11170	spa
dc.language.iso	eng	eng
dc.publisher	Banco de la República	spa
dc.relation.anxdoi	https://doi.org/10.32468/inf-pol-mont-eng.tr2-anex1-2025	spa
dc.relation.anxshortdoi	https://doi.org/pksq	spa
dc.relation.anxshortdoi	https://doi.org/psjk	spa
dc.relation.anxshortdoi	https://doi.org/psjm	spa
dc.relation.doi	https://doi.org/10.32468/inf-pol-mont-eng.tr2-2025	spa
dc.relation.ispartof	Reportes, Boletines e Informes	spa
dc.relation.ispartofseries	Informe de Política Monetaria	spa
dc.relation.issn	2711 - 2128	spa
dc.relation.isversionof	Monetary Policy Report - April 2025	spa
dc.relation.shortdoi	https://doi.org/pksp	spa
dc.rights.Habeas	Datos personales: El(los) autor(es) ha(n) incluido sus datos personales (nombres, correo electrónico, cargo, entre otros) en el Reporte, informe o boletín y por consiguiente, manifiesta(n) que mediante el diligenciamiento y registro de sus datos personales autoriza(n) al Banco de la República el tratamiento (recolección, almacenamiento, uso, circulación o supresión) de todos los datos suministrados con la finalidad de adelantar la publicación del documento en el Repositorio Institucional, dar a conocer su medio de contacto para fines académicos y divulgativos, así como para la construcción de indicadores y estadísticas para el seguimiento y control de las actividades de divulgación del Portal del Banco de la República. Para tal fin, se informa que el tratamiento de los datos personales se realizará de acuerdo con las políticas o lineamientos generales disponibles en http://www.banrep.gov.co/proteccion-datos-personales, en la sección “Protección de Datos Personales - Habeas Data”.	spa
dc.rights.Objeto	Objeto de publicación: La obra de mí (nuestra) autoría tiene por objeto ser publicada en el Portal del Banco de la República e incluirla en el repositorio institucional de esa misma entidad. La obra podrá consistir en documento escrito, audiovisual, audio, gráfico, fotográfico, infográfico, podcasts, etc., y podrá estar en cualquier formato conocido o por conocerse.	spa
dc.rights.accessRights	Open Access	eng
dc.rights.cc	Atribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0	spa
dc.rights.spa	Acceso abierto	spa
dc.rights.uri	https://creativecommons.org/licenses/by-nc-sa/4.0/	eng
dc.subject.brtema	5. Precios, inflación y política monetaria	spa
dc.title	Monetary Policy Report - April 2025	eng
dc.type	Report	eng
dc.type.hasversion	Published Version	eng
dc.type.spa	Informe	spa

Monetary Policy Report - April 2025

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