What the IPC is and how inflation affects you

The IPC (Índice de Precios al Consumidor, or Consumer Price Index) is the indicator Colombia uses to measure how much prices rise or fall, on average, for the goods and services a typical household consumes. When you hear that "inflation was such-and-such percent," that number almost always comes directly from the IPC.

This figure is published every month — what you see here is the August 2026 number, the most recent confirmed as of the writing of this guide. Before using it for any analysis, confirm the current figure on DANE's official site. These are Colombian figures, calculated by a Colombian government agency — don't confuse them with your own country's inflation data.

What the IPC actually measures

DANE tracks the monthly price of hundreds of items — food, housing, transportation, health, education, entertainment, among others — across different cities in the country, visiting neighborhood stores, supermarkets, markets, and other points of sale. With those prices it builds a "basket" that represents what a typical household buys, and compares how the cost of that basket changes month to month.

Monthly vs. annual vs. year-to-date inflation

DANE reports the IPC in several ways:

• Monthly change: how much prices rose compared to the immediately preceding month.
• Annual change: how much prices rose compared to the same month last year — this is the figure most commonly used as "the" inflation reference.
• Year-to-date change: how much prices have risen from January through the reported month.

These three figures almost never match, because they measure different periods. When comparing inflation data from different sources, confirm which of the three you're looking at.

How it relates to your purchasing power

Purchasing power is, in simple terms, how much you can buy with your income. If your salary stays the same but prices rise (positive inflation), you can buy less with the same money than before — your purchasing power drops. For your purchasing power to stay the same, your income would need to grow at least as fast as inflation; if it grows slower than inflation, you lose purchasing power even if your salary's peso figure is higher than last year's.

The IPC and other indicators

The IPC doesn't exist in isolation from other financial indicators. For example, the DTF and financial system interest rates tend to move in the same general direction as inflation: when inflation rises, interest rates tend to rise too, partly because the Banco de la República adjusts its benchmark rate to try to control it. That's why inflation and interest-rate data almost always show up together in economic reports.

Why it matters when building your budget

A personal budget built without accounting for inflation can fall short over time: if your fixed expenses rise each year at a pace similar to the IPC but your income doesn't adjust the same way, the same budget breakdown that worked a year ago can stop being enough. Reviewing your budget periodically, not just setting it once, helps catch that gap in time. The same applies to money you keep saved without earning any return: with high inflation, that money loses purchasing power month after month, even though the peso figure doesn't change.

Categories that carry the most weight

The IPC doesn't treat every spending category equally: it groups household consumption into divisions like food and beverages, housing and utilities, transportation, health, education, and restaurants and hotels, among others. Each division carries a different weight in the total calculation, based on how much it represents in the average Colombian household's spending. That's why, when one specific category — like food or housing — rises much more than the overall average, it can pull the total IPC upward even if the rest of the categories stay relatively stable.

This is general financial information, not personalized financial or tax advice for your situation.

Frequently asked questions