2026/06/08 | Vittorio Peretti, Carolina Monzón, Juan Robayo & Angela Gonzalez
Annual core and headline inflation rebounded again. Consumer prices rose by 0.47% MoM in May (+0.78% in April), between the Bloomberg median (0.52%) and our call (0.41%). The main positive contributors in the month were housing and utilities (+0.86% MoM; +26 bps), transport (+0.61%; +8bps), and hotels and restaurants (+0.38% MoM; +4bps). Housing and utilities explained most of the upside surprise relative to our forecast, with rents adding 14 bps to overall inflation. Consumer prices excluding food rose by 0.59% MoM (+0.25% one year earlier), while inflation excluding food and energy increased by 0.51% MoM (+0.32% in May 2025). On an annual basis, headline inflation increased by 16bps from April to 5.84%, while core inflation increased by 21bps to 6.49%.
Non-durable goods rebounded, while services inflation remained at a high level. Non-durable goods inflation (mainly food) came in at 4.46% YoY (+13bps from the previous month). Meanwhile, energy inflation remained in negative territory, but increased by 167bps to -0.12% YoY, boosted by fuel and electricity prices and contained by gas prices. Amid favorable currency dynamics, durable goods inflation fell by 29bps to 0.08%. Services inflation increased by 23bps to 7.5% (9.5% peak in September 2023), still reflecting the effects after the minimum wage increase. At the margin, we estimate that inflation accumulated in the quarter was 6.8% (SA, annualized; 8.3% in 1Q25). Core inflation stood at 7.6%, down from 9.0% in 1Q26 (SA annualized).
Our take: In the absence of a fuel price increase, our preliminary estimate for June’s monthly inflation ranges between 0.2%–0.3% MoM (July 7 release), implying a CPI close to 6% YoY. Our baseline sees YE26 inflation at 7.0%, above both the analyst survey median and BanRep's staff forecast (both at 6.4%). With inflation still significantly above target, and with an acceleration in core inflation, our scenario sees BanRep resuming its hiking cycle in June with 75bp hike, with a terminal rate of 12.50%.