Year-on-year inflation would exceed 6% in the first quarter of this year. Colombia faces at least three economic risk scenarios in the short term.
Inflation is a monetary phenomenon from which no one gets spared. In Colombia, the national currency lost at least 99.96% of its purchasing power in the last 60 years.
This information can get spotted on the in2013dollars.com web portal, which allows users to run an inflation and devaluation calculator for various currencies based on the information brought by the Official Data organization.
100,000 Colombian pesos (COP) of 1959, which is the year in which the count begins, according to the information provided, is equivalent to COP 36 of 2021.
Inflation Prospects for 2022 in Colombia
Inflationary prospects for the South American nation are not encouraging. According to specialists consulted by the Bloomberg Line portal, there could be an inflationary peak in the first months of 2022.
For example, María Paula Castañeda, an economist at BBVA Research, is convinced that year-on-year inflation will exceed 6% in the first quarter of this year. This inflation will be due to price controls by the Government and due to “the indexation of prices to higher inflation, the increase in the minimum wage well above inflation and a lagged effect of the recent devaluation of the exchange rate on prices.”
Analyst Laura Parra, from Corficolombiana, also believes so. For her, that percentage could get reached in the current month of January. Colombians would particularly feel the increase in food and transportation prices.
Last December, reports on various media outlets brought at least three risk scenarios for the Colombian economy shortly. These are high indebtedness, inflation and stagnation, and the political uncertainty and stagnation of the socio-economic process.
In this context, Colombians require an instrument that allows them to preserve their wealth, and bitcoin (BTC) emerges as an outstanding option. Despite its high volatility in the short and medium-term, the cryptocurrency turned out to be a good haven of value in long periods.
Its immovable monetary policy with a maximum issue that will never exceed 21 million units gives certainty to the market. The impossibility of increasing the currency means that if the demand continues to grow, so will the price of BTC (measured in fiat money).
Those who decide to put part of their savings in bitcoin after analyzing both risks and benefits gain the possibility to acquire it through various exchanges, brokers, and P2P platforms.
Fears of stagflation have plagued the markets in recent months, as prices begin to rise in an economy that is reeling and Colombia does not escape it, as the aforementioned economic study points out.
The 2022 book estimates that Colombia will achieve economic growth of 8.9% in 2021 but warns that this will drop to only 3.4% the following year due to the climate of uncertainty that will attack the nation’s economy over the next year.
By: Jenson Nuñez
