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Itau Revise Rate Forecast Higher to 3% By Year End Versus 2.5%

COLOMBIA

Via Bloomberg article:

  • Upside inflation surprises and increasing external imbalances led to the new estimate, Itau says in note to clients.
  • Tightening cycle likely to start with a 25-bp rate increase, but bigger hikes are expected thereafter, culminating with rates at 4.75% in 2022.
  • Inflation estimate raised to 5.2% in 2021, +80 bps from previous scenario.
    • For 2022, inertia could lead inflation to 3.5% by the end of the year; previous estimate was 3%

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