Colombia central bank raises 2026 inflation forecast

The new inflation projection is up 21 basis points from the August survey, when analysts saw consumer prices ending 2026 at 6.60%. It keeps inflation well above the Banco de la República’s 2% to 4% target band and suggests a slow descent back toward target, with the central bank itself projecting a return to the range only by August 2031.

For investors, that means real rates are likely to stay restrictive for an extended period, supporting the peso but limiting relief for consumers, lenders and highly leveraged borrowers. Colombia’s currency expectations also improved in the survey, with analysts now seeing the peso at 3,200 per dollar by year-end versus 3,300 previously, a sign that markets still expect relatively firm external support despite domestic inflation pressures.

The policy backdrop leaves little room for an aggressive easing cycle. Banco de la República expects the benchmark rate to stay at 12.25% this year, with cuts not arriving until early 2027 and the rate only gradually easing to 10.75% by the end of next year.

In markets, the message is one of persistence rather than relief: inflation expectations are moving up again, but rate cuts are still off the table. The next catalyst is December’s board meeting, where investors will look for any shift in the central bank’s tolerance for slower growth versus hotter prices.