Colombia inflation unlikely to meet target in 2021 -finance minister

FILE PHOTO: Colombia's Finance Minister Alberto Carrasquilla Barrera speaks during the Fourth Colombian Business Congress in Medellin, Colombia August 15, 2019. REUTERS/David Estrada

BOGOTA (Reuters) - Colombia’s consumer prices increases are unlikely to meet the central bank’s long-term 3% target next year, Finance Minister Alberto Carrasquilla said on Friday.

A long coronavirus lockdown earlier this year and associated business closures and job losses have kept consumer demand weak in the Andean country, with analysts repeatedly over-estimating inflation increases.

Twelve-month price growth was 1.49% in November, though analysts had expected 1.7%.

“Unfortunately I don’t think we can meet the central bank’s target, which is 3%,” Carrasquilla said at a virtual business event. “We will only gradually return to the target.”

In a June revision of its fiscal targets, the government had projected inflation of 3% for 2021.

The central bank took advantage of low inflation to gradually cut 250 basis points from the benchmark interest rate, before holding borrowing costs at a historic low of 1.75%.

Reporting by Carlos Vargas; Writing by Julia Symmes Cobb; Editing by Tom Brown