The Colombian economy closed 2025 with an annual inflation rate of 5.1%, according to the National Administrative Department of Statistics (DANE). The official report revealed that the Consumer Price Index (CPI) accumulated over the twelve months through December stood at an expected level, but above the Central Bank’s target range, which is around 3%, once again highlighting the inability of economic authorities to rein in price pressures.
This figure confirmed what several analysts had anticipated in recent months: although inflation lost some momentum compared with earlier peaks in the year, including October and November with readings above 5.3%, the overall trend ended the year with a notable increase.
The pace of price increases remained above expectations in several sectors, especially food and services, factors that have fueled discussions about households’ purchasing power and economic policy decisions for the year ahead.
Inflation in Colombia closed 2025 at 5.1%
The annual rate of 5.1% finalized in December reflects the increase in the cost of living that Colombians faced throughout 2025, with monthly variations that, although moderate compared with previous years, accumulated at a level that exceeds the official target.
The DANE report indicated that in December consumer prices rose 0.27% compared with the previous month, an increase in line with financial market expectations but sufficient to push annual inflation above levels that are comfortable for households.
For monetary authorities, this figure shows that the country still has a long way to go to reach its target in this area. In this regard, the Central Bank has kept interest rates fixed at 9.25% since May of last year, despite criticism from the government, which is calling for a cut to allow greater credit circulation.
In addition, the issuing bank is maintaining a restrictive policy with the intention of moderating price growth, but the persistence of inflationary pressures—especially in essential goods and services—has complicated convergence toward the target range. Core inflation, which excludes food and regulated prices, remained elevated for much of the year, limiting the room for a rapid easing.
One of the most visible elements of this inflationary behavior was the constant adjustment of food prices and other goods with a high weighting in the basic consumption basket. Fruits, tubers, and perishable products posted increases above the national average in several months of 2025, putting pressure on the budgets of millions of families. In some regions, local price variations exacerbated the sense of a loss of purchasing power.
#IPC | En diciembre de 2025, el Índice de Precios al Consumidor registró una variación anual del 5,10%, mientras que la variación mensual fue del 0,27%. pic.twitter.com/5ZUCssxmYT
— DANE Colombia (@DANE_Colombia) January 8, 2026
The controversy over the minimum wage increase for 2026
In addition, the debate over the minimum wage for 2026 was influenced by these figures. With annual inflation above 5%, unions and employers began adjusting their wage increase proposals to avoid losing purchasing power, while productive sectors warned about the effects of higher labor costs in an economic context that remains fragile.
Although critics of the nearly 23% increase in the minimum wage for this year, decreed in December by President Petro’s government, foresee that this decision will negatively affect inflationary pressures, CPI projections for 2026 point to a gradual moderation of inflation, albeit not without risks.
The Central Bank and other analysts expect that monetary policy measures, along with a reduction in supply pressures that affected food and other goods, could push inflation toward levels closer to the target in the coming years.
However, the speed of this adjustment will depend on global and domestic factors, including international input prices and conditions in the domestic labor market.
This year-end close with inflation at 5.1% makes it clear that the battle against rising prices remains a central issue for the Colombian economy and will shape economic policy decisions for 2026, with direct impacts on consumers and businesses.