Inflation in Colombia in 2022

I suspect much of the inflation is dampened by the strong dollar.

We have a small business opened for 3 months.  In those 3 months, we've already had to raise our costs to clients.  No one said a thing....

Hello mtbe,

Thank you for taking the time to reply.

For how long have you been in Colombia now?

Feel free to start a new thread on the Colombia forum to share with us how hard/easy it was for you to start a business in a foreign country.

We would like to hear your story.

Cheers,

Cheryl

Expat.com team

"I suspect much of inflation is dampened

by the strong dollar."

   -- poster mtbe

------

Mikael asked what Expats are doing to

curb inflation's effects in Colombia.

We are paying in Pesos, not Dollars, to

take advantage of the continual

strengthening of the Dollar.

If your hotel asks what currency you

are paying in, choose Pesos.

Keep track of the exchange rate so

you don't get caught exchanging Dollars

at 4000 Pesos to the Dollar, instead of

4904 (today's xe.com rate) or whatever

it is at the time.

For months, we have been posting every

week, often late on Friday after the

exchange officially closes .. on Expat.com

threads.  The most current thread is

Dollar Supremacy! and is reachable at

the Colombia Forum welcome page's

list of threads.

cccmedia

Yes, those of us in Colombia are paying in Pesos.  But if us US citizens did it...do I dare say....smart, we kept the majority of our funds in US dollars.  So, extracting from ATMs will give us Pesos...and it get's better each day ... at least recently.  I may wait a few more months before buying that motorcycle I've had my eye on.  Although the price could increase with the strength of the dollar.

Not sure how the Peso is against the Euro, but I think it is more stable, and Europeans may not benefit as much as us Americans with the falling peso.

Just today, Petro begged the country to not send money abroad...to keep it in Colombia. 

So another reason not to invest a big chunk of dolars in Colombian real estate.

Unless you are swimming in $money and dont mind losing a big chunk of what you invest,

A few guys out there like that.

@mtbe The peso had 2 big recent drops against the Canadian dollar, which could not be explained by the strength of the US Dollar.

One was after the election on June 19. The second was a few days ago, after the government released the budget (the biggest in Colombian history). At the same time, the Banco de la Republica disapointed markets with their smaller than expeted rate increase.

According to Bloomberg, since June 19, the US Dollar has appreciated by 10% against a basket of OECD currencies, whereas it has appreciated 25% against the Peso.

Thus 60% of the drop in the value of the Peso during that period can be attributed directly to Colombian politics and fiscal and monetary policy.

@Mickael Inflation by itself is not the whole story. We have just sold our last unit in a multistory construction in Manizales. The devaluation of the COP combined with increased costs related to inflation (and COVID material scarcity) took a significant bite out of the ROI on that project. For our next project, while having to navigate higher costs, we hope we can also gain a bump in terms of expats interested in buying into our gated community. We hope that those expats who will enjoy a strong USD/COP conversion will feel more bullish in this real estate market and that should be good for our ROI. For US expats, the USD/COP conversion is the big story and not inflation. In fact, for US expats in Colombia, we should all say a little thank you that we are not in the US right now, where inflation is across the board, interest rates are almost at 7%, and stocks are significantly down (hello 2019...). Those in the US that haven't received at least a 10% wage increase or made 10% more than the last two years (and are making less than $100,000), are really feeling it. Here on the other hand, one's USD has seen an increased valuation of around 31% since 2020. That valuation off sets nearly any inflationary increases in prices here in Colombia. The one recommendation that I would suggest is don't buy much at PriceMart right now and try to shop local as much as possible to reduce inflationary costs related to USD driven materials/transports/imports. Lastly, on that note, make sure to give a bump to your Colombian maid, gardener, handy man, etc., that makes life so nice in Colombia. They are getting squeezed, and the extra 100,000 COP or so a month should be a rounding error in an expat's annual budget (in my HPO).

A strong USD/COP conversion doesn't help if the US expats are afraid to come to Colombia.  With prices increasing for Colombians, and no relief in sight, crime is bound to increase.

A gated community is only good if you isolate yourself within.

Just spent a month and a half in Colombia, 2 weeks in Barranquilla and the rest in Funza. I found that the area that I stayed in Barranquilla was pretty much US prices unless I ate at the cafeterias in the malls. Funza which is a suburb of Bogota was great on prices for food, haircuts, uber, taxi ect. I noticed that on the streets people openly used their cell phones, many businesses had their cash registers next to the entry door/sidewalk openly handling cash. Didn't appear to be any concern about robbery, I asked my Colombian wife about it. She replied that the mayor had a special way of dealing with problem people. I walked the streets daily for a month with my wife and bulldog, the only problem that we had was she gained 7 kilos. Must have been all those yummy pastry shops on the way back to our apartment. We have a 3 bedroom 2 bath with excellent security and maintenance for 250 usd a month. Did some checking on Cartagena, Sincelejo, Barranquilla and Bogota and I think for the same quality it would cost at least 400 usd a month. Want to make a trip to Cuenca Ecuador to see how the security and economy is there. Wonder if anyone has information for that location.