UPDATE 1-Colombian March inflation slower than expected

* Inflation rate far slower than that of same 2009 period

* Central bank seen holding interest rates steady for now
(Adds context)

By Leonardo Suarez

BOGOTA, April 5 (BestGrowthStock) – Colombian consumer prices rose
a lower-than-expected 0.25 percent in March, decelerating from
0.50 percent inflation registered in the same month last year,
the government’s DANE statistics agency said on Monday.

Analysts in a Reuters poll last week said that they
expected March inflation of 0.62 percent, according to the
average forecast given by 32 market experts surveyed.

The central bank was expected to keep its key interest rate
steady at 3.5 percent, given the slow increase in prices.

“This will put off any increase (in the rate), probably
until the last quarter,” said Camilo Perez, chief economist at
Banco de Bogota.

Twelve month inflation through March was 1.84 percent, far
lower than the 6.14 percent rise seen in the 12 months through
March 2009. The central bank has set an inflation target range
of 2 percent to 4 percent for full-year 2010.

Colombia’s strong policy framework has helped protect its
economy from the global slowdown, setting the stage for a
“generally positive” 2010 outlook, the International Monetary
Fund said in a report last week.

Monetary and fiscal policies should remain broadly
supportive until there were clear signs of a sustained recovery
in economic activity, the Fund said.

The Andean country’s economy slowed in early 2008 after
policies were tightened to address overheating during a
2004-2007 boom period as President Alvaro Uribe’s security
policies attracted international investment.

The global crisis caused private investment to collapse in
the last quarter of 2008. But domestic demand began recovering
in the second half of 2009.

Gross domestic product eked out 0.4 growth in 2009. The
government forecasts a 2.5 percent GDP expansion this year.
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(Reporting by Leonardo Suarez; editing by Carol Bishopric)

UPDATE 1-Colombian March inflation slower than expected