By 2023, Housing in Colombia faced a challenging scenario, characterized by the continued upward trend in inflation since the start of the pandemic. This phenomenon has left its mark on the purchasing power of households in the shopping cart.
One of the determining factors in this panorama was the increase in rental prices and the sharp increase in the prices of public services.
First of all there was one increase of 6.37% in imputed rents and 5.93% in effective rental prices compared to the previous year. These variations had a direct impact on household spending.
Cities such as Neiva and Cúcuta, which are among the three with the highest inflation in the basket, showed a smaller decline in real expenditure. This situation could be explained by the willingness of consumers to adapt to higher price increases in public services, and also by the presence of government subsidies.
During the first quarter of 2023 gas service experienced a notable impact, reflected in a spike in inflation, possibly attributable to the accelerating increase in natural gas prices. Despite the extensive reserves of this resource in Colombia, extraction and exploration have remained at low levels, creating uncertainty about reserves and affecting demand in several parts of the country.despite the fact that inflation fell in the following months thanks to the fall in international prices.
The energy sector was faced with a situation arising from the financial problems of distributors and marketers, especially in the Caribbean coastand the combination of high energy prices with the El Niño phenomenon. Although there is relief between August and October, the situation deteriorates again at the end of the year, underscoring concerns about the viability of many companies in the sector.
The reduction of subsidies for energy and gas services (approved in the National Development Plan) had a negative effect on household spending throughout the year.
In the aqueduct service, the trend remained stable compared to the other two services. It is pertinent to note that the allocation of expenditure in the basket has declined significantly post-pandemic, although in regions such as the Caribbean, there has also been an impact due to tax burden.
Source: El heraldo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
