The increase in housing prices lead to inflation to the target Issuer 3% in June

The prices of the basket would have increased 3% in the past year, to June, which would lead to the inflation target of the Bank of the Republic. The market suggests that housing, food and fun are the products that have had the highest growth in the sixth month of the year.

Foreseen by the average analyst, who according to a Probe LR projected variation in the Consumer Price Index (CPI) in June will stand at 0.3%, bringing the figure to be revealed tomorrow the Dane, in the last twelve months amount to 3%. The increase would be higher than in the same month in 2013, when it stood at 0.28% and the twelve month figure reached 2%.

The sector that presented the greatest increases in this month would be the housing. Santiago Alvarez, Professional macroeconomic analyst firms, indicates that increases in this area should not only to a rise in rents, but the increase in house prices, which is related to the limited supply of land and building . This added to the value of public services has increased due to low reservoir levels by drought.

The Central Bank has warned of an increase in appropriations in the country and the manager José Darío Uribe said after the latest board their concerns especially the increase in the mortgage portfolio, which in the end is being reflected in prices.

The food, meanwhile, would register an increase of 0.66%, according to the projection of Bancolombia, higher than in June 2013 figure but lower than in May this year.

Oscar Jaulin, Serfinco macroeconomic analyst, believes that food prices are over correction coming after submitting the low figures recorded last year. "We do not believe that after growth of 1.17% last month this item follow with this performance and risk in this month we see the low, after five months up above 0.5%."

In the sector of entertainment, there are opposing views among analysts, because while a project that will have fallen on account of the transfer of the Colombian professional football late in May, which made this month to shoot this category, other as José David López, economic analyst and Investment Advisors, says that the World Cup will be promoting the rising prices in this sector.

In the past five months, the result of inflation has been above market expectations, which has made the long-term projections increase. Before this, the Central Bank increased the interest rate by 25 basis points at its last meeting to 4%. In fact, the Issuer warned that in the last month increased the upside risks to inflation.

Increase year-end projection to 3.4%
After inflation of 0.48% in May, well above that expected by the market consensus of 0.31%, most experts revised their inflation forecast for the end of the year and went from 3 1% according to a Probe LR to 3.4% this month. Ana Maria Toro, consultants Securities analyst, said the increase is also due to the good dynamics that is taking the economy and growth of 6.4% in the first quarter.

In some analysts' expectations and the impact it could have on El Niño, which is expected for the second quarter of the year is included. Daniel Velandia, director of economic research at Credicorp Capital, said before the results expected by the Issuer continuously increase the interest rate to reach 5%.