Colombia’s Growth Consistent With 3% CPI Target, Meisel Says

Colombia’s economy will be best served by ensuring that inflation converges to target, which policy makers anticipate may occur next year, central bank co-director Adolfo Meisel said.

Consumer prices will probably rise less than the target this year because of weak internal demand, the peso’s gains at the start of 2012, central bank chief Jose Dario Uribe said last month. Meisel last night said inflation will finish “very close” to the target in 2014. Colombia targets inflation of 3 percent, plus or minus one percentage point.

“The target is in the long term at 3 percent, which is considered consistent with Colombian growth,” Meisel said. In that context, Meisel said the economy will grow 3 percent to 5 percent in 2013 with 4 percent the most likely pace.

Finance Minister Mauricio Cardenas said last month the economy can grow at an annual rate of 4.8 percent without generating inflation. Gross domestic product rose 4 percent last year, slower than Chile and Peru, and down from 6.6 percent in 2011.

The annual inflation rate rose to 2.02 in April from 1.91 percent in March and a 55-year low of 1.83 percent in February. Consumer prices will rise 3.02 percent over the next year according to an April central bank survey of economists, down from a 3.04 percent forecast in March.

The peso yesterday fell 0.2 percent to 1,830.82 per U.S. dollar.

To contact the reporter on this story: Oscar Medina in Bogota at omedinacruz@bloomberg.net

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