(Bloomberg) -- Colombian consumer prices jumped far more than expected last month, increasing pressure on the central bank to raise interest rates further and faster to bring it back under control.
The annual inflation rate surged to 6.94% in January, its highest level since 2016, the national statistics agency said Saturday. That's higher than expected by all 18 analysts surveyed by Bloomberg, whose median forecast was 6.39%.
Prices rose 1.67% from December, the highest monthly increase since 2001. Annual “core inflation,” which is designed to track underlying trends by excluding the most volatile prices, also soared, accelerating to 4.47%, from 3.44%.
The central bank has raised its benchmark interest rate 2.25 percentage points since September to 4%, and last month surprised analysts with a bigger-than-expected increase as it tries to get on top of surging prices. Central bank co-director Mauricio Villamizar said in an interview last week that inflation is likely to peak in the first quarter and then start to slow.
Read More: Central Banker Eyes an End to Stimulus for Fast-Growing Colombia
Consumer price increases have surged above target in Brazil, Chile, Mexico and Peru, as well as in other emerging markets and in rich nations, as global demand rebounds before supply chains are fully recovered from the pandemic, and businesses pass on higher global food and energy costs to customers.
Colombia's central bank targets annual inflation of 3%, plus or minus one percentage point.
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