Colombia's inflation soared to its highest rate in seven years as a result of a massive drought. This drought has caused decrease in food supplies and a dip in the Colombian peso which has raised import costs. Food prices have risen 12% since the beginning of 2015 and health care costs have risen slightly more than six percent. The Colombian central bank has raised interest rates to 6% in order to curb the inflationary pressure. It is expected that Colombia will raise their interest rates even further in the coming months.
The Colombian peso has dropped 43% in the last 18 months. This makes it the second worst performing emerging-market currency in the world. The Colombian Central bank governor predicts that their inflation will drop to four or five percent by the end of the year, as the impact of the weather and the weak peso begin to subside.
http://www.bloomberg.com/news/articles/2016-02-06/colombia-inflation-soars-to-highest-signce-2008-amid-drought
It's sad that Colombia's economy is dependent on factors out of anyone's control. I hope the international community will decide to help Colombia in some way!
ReplyDeleteAs far as non-developing countries go, Colombia seems to just barely fit the mold,as they have the second worst performing emerging market currency in the world. Additionally, the country is currently experiencing an outbreak of Lika. Clearly this drought was another painful setback. It will be interesting to see how and if the United States responds in terms of trade and financial help
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