Academic literature on the topic 'Consumer basket of foodstuffs'

When looking for economic policy instruments in the times of economic crisis, even tax instruments are considered, particularly the changes (increases) of the value added tax rates. Most of the EU member states have two VAT rates, while foodstuffs and non-alcoholic beverages are included under a reduced rate. If increasing the reduced VAT rate, the significance of the foodstuff or non-alcoholic beverages in the consumer basket, the regression of the VAT in these commodities and the significance of the impact on households should be considered. This article tries to point out this issue by analyzing the impacts of changes in the VAT rates, or the actual VAT paid by the average households in the Czech Republic in the period from 2005 to 2010.

The article deals with the modelling of demand for the food group of milk and milk products and the food group of meat, meat products, eggs and fish using the Marshallian demand functions for the individual income quartils of Slovak households. The criterium for the foodstuff groups selection is their position in the Healthy Eating Pyramid which is one of the recommended optimal food basket forms. We suppose that the significant income differentiation of households will manifest as different consumer behaviour in the food market. The analysis confirms this hypothesis.

This study analyzes the correlation and the interaction among commodity groups which determine the inflation rate in West Sumatera. Using the monthly data from January 2002 to December 2008, the estimation applies the Vector Error Correction Model (VECM) in order to analyze the dynamics of commodity prices in the model.The results show some groups have significant contributions in determining other group prices. We found that the volatility of Prepared Food, Drink, Cigarette, and Tobacco is affected by Food group, Transportation, Communication and Financial Services. All commodity group is mostly affected by its own movement, especially for the high regulated prices group; Water, Electricity, and Fuel group including Housing.This paper underlines that in controlling regional inflation, the partial effort by focusing only on the basket goods which gives the highest contribution to the regional inflation (i.e. foodstuff and prepared food) is not effective when the region faces high volatility in other basket goods (i.e. transportation). The price determining of basket goods is a simultaneous process, and controlling the regional inflation needs greater concern to all goods. The government intervention on the price setting is also one of the important parts in causing the volatility of the basket goods.JEL Classification: C32, E31, R10.Keywords: Consumer Price Index, regional inflation, vector error corection model, impulse response, variance decomposition.

In a market basket study made in Nanjing, China, in which the most common consumed nine kinds of vegetables foodstuffs were sampled, the contents of 16 polycyclic aromatic hydrocarbons (PAHs) were analyzed using gas chromatography with mass spectrometer detector (GC-MS). The results showed that the total amount of 16 PAHs was within the range of 60.5~312 ng g−1 (wet weight). The ranking of total concentrations for different types of vegetables in decreasing order was leafy vegetable, fruit vegetable, and rhizome vegetable. Source analysis suggested that coal, oil, or other incomplete combustion of biomass mainly contributed to the concentration of PAHs. The margin of exposure (MOE) approach with age/gender group-specific daily dietary exposure level was used to estimate the carcinogenic risk. The calculated total mean MOE in the case of BaP and PAH4 (sum of BaA, CHR, BbF, and BaP) was 14960 and 7723, respectively, for local residents. In addition, the MOEs in PAH4 for some groups of both male and female were below the critical limit of 10 000 proposed by EFSA. Therefore, health effect owing to the consumption of vegetables on local residents needs high concern.

The article touches upon the problem of forming the consumer goods basket, which is an important social factor determining the living cost of the population. Analysis of the methods of calculating the consumer goods basket in the Russian Federation and in the Astrakhan region has shown that food products make up 50% of it, which is 2.5 times higher than their share in consumer goods baskets of economically developed countries. In terms of the variety of products and services, the consumer goods basket in Russia is a clear outsider: it contains 156 items against 350 - 475 items in Western Europe and the United States. It can be considered a consumer goods basket of the poor, because it only provides an opportunity to survive in conditions of austerity. The comparative analysis of food products included in the basket of the Astrakhan region and recommended by the Ministry of health of the Russian Federation revealed significant deviations from the rational consumption standards. Their observance will increase the living cost of different categories of population in the region from 4.5% to 20% and require an increase in regional budget expenditures for providing social support measures by 15%. It has been inferred that the dual role of the food basket in the economy is explained by two opposite goals: social and budgetary. The goals of social development dictate the establishment of the volume of food consumption in accordance with scientific recommendations. The goals of budget savings lead to underestimation of the basket cost due to using a limited number of cheap products and an incomplete list of goods and services for normal human life. It is necessary to review the composition of the consumer goods basket in favor of a healthier and more useful set of products, expanding the range of non-food items and the list of services. The expansion of the consumer basket can become an effective factor in the growth of consumption volumes, the growth of business income, taxes and the state budget, reach the higher living standards in accordance with the requirements of the social market economy

The article argues for a proposal for such a step in the direction of strengthening social support for the least protected groups of the Russian population and the development of the entire system of social state guarantees as a whole, as the introduction of a socially acceptable consumer basket instead of a consumer basket of the subsistence minimum. The advantages of the normative method of forming consumer baskets over the normative-statistical method are revealed. Based on the analysis of actual consumption of both food and non-food products and services, the qualitative and quantitative structure of the socially acceptable consumer basket is determined (using natural and value indicators).

This article studies the impact of in-store “surprise” coupons (e.g., electronic shelf coupons, peel-off coupons) on consumers' total basket of purchases. A conceptual model is developed that (1) predicts that the use of a surprise coupon will increase the size of the shopping basket and the number of unplanned purchases made on the shopping trip and (2) predicts the type of these unplanned purchases. The authors present the results of an in-store experiment and analysis of the Stanford Market Basket Data to test these predictions.

In a market situation, where the products of competing companies are becoming more similar, whether in quality or price, it is still necessary to look for new and new tools that should properly differentiate the various products or services from the competitive company. Undoubtedly one of these tools is the image that has become an essential part of marketing. Image is essentially the idea, symbol, which the consumer associates only at the mention the name of the product or company. Image performs several tasks. First, its role is to eliminate the anonymity between producer and consumer and on the other hand, image subjectively facilitates a customer orientation to market and thus facilitate decision making. Customers are fed up with information on the products and services, and so they replace the lack of objective knowledge by creating their own ideas. Sometimes these ideas may be even stronger motive to buy properties as the actual product.

Loyalty programs for convenience stores generate consumer shopping histories that are both large in size and sparse in content. Analyzing such data with traditional basket models is computationally difficult since most models are not scalable to a large set of categories. However, analyzing large data with traditional models has important advantages: the models capture consumer (shopping) behaviors that assist managers in making strategic decisions. In this thesis, we develop two studies to analyze this large and sparse convenience store shopping data. In the first study, we bridge the gap between traditional basket model analysis and the challenges of large shopping data by developing a retail market basket modeling system that captures essential elements of consumer shopping behavior in a computationally attractive manner. An application of the model to convenience store basket data yields excellent results. The main outputs of the model (segmentation structure, cross-category dependence, price elasticities) align well with managerial intuition. Moreover, the model provides excellent forecasts to a holdout sample of consumers. Using the model, we examine the revenue impact of a change in promotion policy. In the second study, we add spatial extensions to the previous model to solve a more complex problem: retail location analysis. We develop a spatial basket model to analyze the spatial pattern of consumer heterogeneity across stores, and show how to use this model to predict the demand of a new store (without any data of consumer purchase history). The main outputs of the extended model also align well with managerial intuition. Additionally, the model provides excellent forecasts to the demand of the hold-out store.

The public health landscape in South Africa today is characterised by a double-burden of nutritional challenges. Under-nutrition is prevalent, as is evident from the high levels of childhood stunting that are reported. Deficiencies of micro-nutrients such as vitamin A and iron continue to be prevalent in children, females and vulnerable groups. Simultaneously overweight and obesity among adults and children together with an associated increase in the occurrence of non-communicable diseases (NCDs) such as diabetes and cardiovascular disease are increasing steadily to epidemic levels. With approximately 40% of the population living under the International Poverty Line and approximately a quarter of the population not able to obtain enough food to fulfil their daily energy needs, poverty and food insecurity are harsh realities in many South African households. The ability of a household to make healthy food choices is, among other factors, affected by food affordability. Food affordability is determined by household income relative to the cost of purchased food items. In recent years, food affordability in South Africa has been under increased pressure due to the following factors: household income-growth barely keeping track with inflation, rising unemployment, as well as high and ever increasing food prices. The pressure on lower income households is particularly profound, forcing such households to use about a third of total expenditure for food purchases. In this study, a multi-disciplinary approach was used (including principles of nutrition, economics and consumer behaviour sciences) to develop models to measure the cost and affordability of healthy eating in South Africa at a national level and on a socio-economically disaggregated basis. The healthy food basket model was primarily based on the South African Food-based Dietary Guidelines, typical food consumption patterns, household demographics and official urban retail food prices monitored by Statistics South Africa. Food affordability is a major challenge, with 60% of the population unable to afford the Moderate-cost Food Basket which provides greater nutritional diversity. The more economical Thrifty Healthy Food Basket (approximately 30% less expensive) is only affordable to approximately half of the South African population. A four member household earning two minimum wages has to spend a third of total expenditure on food to be able to afford this basket, while the typical food expenditure share of such households is usually lower (approximately 24%), thus confirming the pressure on households to afford healthy eating. In future the models of healthy eating also present possibilities for further expansion (e.g. these models can be refined to study different geographical areas or different household structure typologies). Compared to national nutritional recommendations, the study found that the intakes of whole-grain starch-rich foods, lean meat, fish, eggs, dairy, fruit, vegetables and legumes were low. Inadequate intake was generally more severe among lower income households. Less-affluent households spend a large proportion of their food budget on starch-rich staples, fats / oils and sugar-rich foods, but allocate insufficient resources to animal-source foods, legumes, fruit and vegetables. This study also identified that excessive intakes of refined and processed starch-rich food options, sugar-rich foods and fats / oils were common across all income groups and increased with socio-economic status. These findings confirm the reality of the nutrition transition in South Africa. The contribution of this research to estimate the socio-economically disaggregated consumption of animal-source foods (meat, fish and eggs) and starch-rich foods (maize meal, bread, rice and potatoes), provides valuable insights into differences in food intake across the socio-economic spectrum of South Africa. A complex combination of interventions is required to promote healthy eating patterns in South Africa. In addition to legislative measures (e.g. salt and sugar reduction legislation), consumer education (across the socio-economic spectrum) should focus on science-based practical solutions and provide advice on making healthy and budget-conscious food choices. In addition, it is also important to design and implement policy actions to improve the affordability and availability of healthy food options for the various socio-economic groups, in diverse geographic locations in South Africa. The improvement of food affordability is a key component in moving closer to achieve the Sustainable Development Goal of the United Nations “to end hunger, achieve food security, improve nutrition and promote sustainable agriculture”. Furthermore, improving household food and nutrition security (including addressing issues pertaining to healthy food consumption and affordability), through public and private sector actions, is one of the enabling milestones in the National Development Plan 2030. The monthly costing of the food basket models which were developed in this study and analyses thereof should be used as policy analysis tools to act as a practical, scientific basis for the food security debate in South Africa. These tools are, in fact, already published on a quarterly basis in the public domain. In future the models of healthy eating also present possibilities for further expansion (e.g. these models can be refined to study different geographical areas or different household structure typologies).
Thesis (PhD) - University of Pretoria. 2020.
Financial support received from: * The Bureau for Food and Agricultural Policy (BFAP) * The Department of Science and Technology (DST)/National Research Foundation (NRF) Centre of Excellence (CoE) in Food Security * Agbiz * Red Meat Research and Development South Africa (RMRD SA) * DST/NRF South African Research Chairs Initiative (SARChl) in the National Development Plan Priority Area of Nutrition and Food Security (Unique number: SARCI170808259212) * University of Pretoria
Animal and Wildlife Sciences
PhD Nutrition
Unrestricted

Master´s thesis deals with problems of consumer behaviour in the Czech republic. Theoretical part of thesis defines basic concepts and data, which relate to consumer demand and information necessary to understand the analysis part. The following part deals with critical analysis of consumer basket and spending costs of households in different commodities. Analytic part is also aimed at economic development and according to it we can deduce reactions of households and related consumer behaviour. At the end the thesis is completed by suggestions to reduce excess spending expenditures, which are recommendation for citizens of the Czech republic.

Dans ma thèse, j’étudie les représentations mentales et les processus cognitifs qui sous-tendent le calcul mental sur le marché. Cette thèse contribue à la recherche de prix psychologique en décrivant de nouveaux facteurs qui influencent les jugements de prix des consommateurs. En particulier, je découvre facteurs qui rendent les consommateurs plus ou moins susceptibles d’arrondir les prix vers le bas (Essai 1) et les facteurs qui déterminent leur tendance à se fixer sur les différences de pourcentage (Essai 3). En outre, cette recherche fournit de nouvelles perspectives à la littérature de budgétisation mentale en identifiant des stratégies de calcul mental qui conduisent à des estimations panier de prix plus précis (Essay 2). Dans l'ensemble, ma recherche va contribuer à notre compréhension des jugements de prix des consommateurs et proposer des contextes et des stratégies conduisant à des évaluations de prix plus précis
In my dissertation I look at mental representations and cognitive processes that underlie mental arithmetic in the marketplace. This research contributes to behavioral pricing literature by outlining novel factors that influence consumers’ price difference judgments. Particularly, I uncover factors that make consumers more or less likely to fall prey to the left-digit anchoring bias (Essay 1) and factors that determine their tendency to rely on relative thinking in price difference evaluations (Essay 3). Further, this research provides new insights to the mental budgeting literature by identifying mental computation strategies that lead to more accurate basket price estimates (Essay 2). Overall, I expect my research to contribute to our understanding of consumers’ price judgments and suggest contexts and strategies leading to more accurate price evaluations

Measurement of price level with consumer price indices forms some gap between measured inflation and perceived inflation. The graduation theses is concerned with quantification of gap in particular group of individuals and shows on measuring data, how this gap influents individuals, if growth of cost of living according to consumer price index copies price perception. It illustrates influence the incorrect construction of indices as important orientation point in economy, which redistribution of recourses, in context with usage of indices for income indexation and suggests more appropriate approach for constructing aggregate price index. It investigates what factors influence price perception and comes into gain and loses calculation which people are confronted. Price perception is influenced both socio-economic and political environment. The end of theses overlaps into political vote and investigates if there is causal of relationship between price perception and political vote.

The thesis discusses what it means to institute a minimum wage and the different types of wages in the Czech Republic. It also deals with an overview of changes in the minimum wage in selected countries of the European Union, and unemployment in the countries. To find out what you can buy for minimum wage are given consumer basket of major cities in selected countries. The next chapter deals with the influence of the minimum wage on unemployment. The conclusion discusses the possible impact of the minimum wage in the construction industry.

The thesis Consumer basket of cycling tourists in the Czech Republic deals with the creation of the consumer basket, which includes common expenses of cycling tourists during their cycling holidays and cycling trips in the Czech Republic. As part of the work was carried out a survey among Czech cycling tourists, whose results are analysed in the work.

Senior policy of the state is largely focused on the active life of seniors (eg national strategy to support positive aging for the period 2013-2017 ). From this pont of view is generally expected to stay seniors longer in their natural environment and any subsequent use of social and health services, residential care homes for the elderly. Another phenomenon is the senior policy burden on the state budget in raising funds for the payment of pensions. One means of this policy mainly at regional level is to support seniors through discounts and other advantages Senior Pas project. The author draws a comparison of the consumer basket of the general population in the age structure from 55 years and above users Pas Senior Discount Network , which is primarily intended to support active living. The theoretical part focuses on the description and benefits, deficiencies discount networks in general and the discount network designed primarily for seniors. Thesis will also undertake an excursion to the neighboring countries, especially Austria and Germany, this excursion could give a number of inspiring suggestions in monitoring the functioning of these networks. In the practical part, thesis will devote particular network Senior Discount waist and through a questionnaire survey of members of the network. Thesis will be noticing all the available factors affecting the selection and use of discount networks in relation to age, place of residence, gender and other attributes/parameters. Thesis will help to answer the question whether discount network tends to increase the active life of seniors primarily or secondarily through capital cost savings for common services and goods. Author of acquired knowledge and experience will provide recommendations for fulfilling the mission and good functionality of discount network Senior Pas.

This chapter examines northern Maryland's economy and workforce from the 1790s through the 1810s. The region had prospered during this period, given that the Napoleonic Wars disrupted farming and trade in Europe and the Caribbean, thus creating a void that allowed Americans to reap a windfall by supplying the belligerents and their colonies with foodstuffs. As commodity prices soared, northern Marylanders waded deeper into export markets and were drawn more closely into Baltimore's commercial orbit. In these heady decades, many people cast caution to the wind, speculating in land, purchasing consumer goods on credit, and amassing fortunes in dubious notes issued by rural banks and turnpike companies.

Chapter Two demonstrates how differences in the economic, political, and ethno-racial structures of the United States and Argentina generated distinct experiences around Italian foodstuff for migrants in the two countries. In Buenos Aires, migrant merchants constructed racialized and gendered bonds between Italians and Argentines as members of the same “Latin race.” This latinità created opportunities for shared consumer experiences between Argentines and Italians. In New York, conversely, migrants used foods to articulate differences between Italians and Anglo Americans, while insisting that divides could be bridged as Anglo Americans learned to consume quality Italian imports. Furthermore, Chapter Two argues that nation-based differences allowed Italians in Buenos Aires to more powerfully articulate their ability to influence Argentine tariff policy and secure continued access to homeland foods.

Capacity utilization in macroeconomics is always related to inflation rate and unemployment level. However, the Great Recession has taught us that there might have been other factors considered in determining and/or be determined by capacity utilization. In order to further enhance Phillips Curve relationship unconventional variables such as financial and survey variables are considered. The relationship between capacity utilization rates and several real variables such as industrial production, gross domestic product growth rate, unemployment rate, consumer expenditures, financial variables such as return on BIST 100 index, exchange rate of currency basket, interest rates, survey variables such as consumer consumption index, business tendency survey and survey of expectations is investigated using data between 2006 and 2015 for Turkey. All of the above-mentioned variables indicate the production capacity and their repercussions on other macro variables except the level of standard of living. We also highlight the repercussions of production capacity concerning welfare state.

Reconstructing prices and price indexes for pre-industrial societies is always a challenge for researchers. Despite the fact that several account books have been preserved and may offer purchase and sale prices of a wide range of goods, the definition of a consumer basket – a set of different quantities of goods forming the basic consumption unit for an average individual or family – faces several difficulties. Average consumption is difficult to establish even in pre-industrial times, since buying activities vary of course not only according to wealth and income, but also to social class; and it is usually difficult to record and weigh self-consumption. It seems more important to offer some parameters from a single case study, the ledger of a Venetian patrician recording his purchases on a daily basis, in a couple of months in 1455.

This chapter traces the way schooling systems have become increasingly implicated in and infected by a singular neoliberal policy strain culminating in an alarming propulsion of so-called ‘disadvantaged’ young people out school in affluent western countries, effectively resulting in a denial of their access to relevant and equitably funded public education. By listening to the stories of young people who have been ‘shoved’ out of school in order to sustain the neoliberal meritocratic sham, the chapter explores both the conditions that have led to their forced disconnection from schooling, as well as a very different set of conditions which young people ‘speak into existence’ when they are permitted to re-engage with learning in alternative educational settings. The educational policy message of this chapter is that far from being the uneducable pathological ‘basket cases’ the neoliberal policy regime insists on portraying them as, these young people are in fact canny witnesses and agents capable of constructing a very different set of learning conditions—ones that are anathema to the competitive, individualistic, consumer-driven and elitist policy trajectories that have exiled them.

ABSTRACT Background: Malnutrition has become an urgent global health problem. Millions of people are killed or disabled every year due to insufficient nutrition. Indirectly influenced by upbringing, food availability, socio-economic, cultural, and environmental factors. Based on the regency, the highest percentage is in West Sumba (12.20%). This study aimed to find out the factors related to malnutrition events in under-five children in Kabukarudi village, East Nusa Tenggara. Subjects and Method: This was a cross sectional study conducted in Kabukarudi Village, Lamboya District, West Sumba Regency, East Nusa Tenggara. A sample of 99 was selected by purporsive sampling. The data was analyzed by chi square. Results: Relationship between knowledge level (p = 0.047), type of foodstuff (p <0.001), and infectious diseases (p <0.001) it was statistically significant. Conclusion: Malnutrition events in under-five children is associated with knowledge level about nutrition, type of food consumed and infectious disease. Keywords: malnutrition, knowledge, food variant, infection desease Correspondence: Theresia Puspitawati. Public Health Study Program, Faculty of Health Sciences, Universitas Respati Yogyakarta. Jl. Laksda Adisucipto KM.6,3, Ambarukmo, Caturtunggal, Sleman distric, Yogyakarta 55281 E-mail: thpuspitawati@gmail.com. Mobile: +628122719110. DOI: https://doi.org/10.26911/the7thicph.01.21

Abstract People with disabilities often struggle with mobility issues, so there is a strong desire for devices such as powerchairs, which can provide more freedom. Currently, wheelchair demand in the US is increasing due to an upsurge in the elderly population. Often electric powerchairs suitable for outdoor use are extremely expensive, cannot be used indoors, and are not covered by medical insurance. In this project, these problems are addressed through the design of a chair which is suitable for both rough outdoor terrain and indoor use. This project is based on a request for a powerchair which our client’s son, who has cerebral palsy, can use on family trips in outdoor environments including grass, gravel, and sand. A photo of a previous nonfunctional prototype was provided to the team as a reference, and a full redesign was performed to resolve the problems identified. Before proceeding with the design, various sources were consulted to gain a thorough understanding of currently available technology and design methods. Many different adjustment methods and features were considered, including an adjustable frame, tracks, and a lifting system for curb mounting. The overall design selected is a welded sheet metal frame with wheels, and it was determined that the chair should have an adjustable wheelbase width to provide both outdoor stability and indoor maneuverability. Key considerations for the design include battery life, motor torque, maximum load, seat size, door width, and cost. The final specifications are based on the needs of the client, Kevin Sample, as well as an analysis of the wider consumer market. The width adjustment design uses an axle above the driving wheels, which are connected to it by sliding sleeves. Automatic adjustment is accomplished using a linear actuator. The drive wheels are large and run at low pressure to surmount obstacles and damp vibrations. Differential steering combined with rear caster wheels gives the chair a small turning radius, and its length is comparable to that of standard manual wheelchairs. The seat can be easily removed to access the battery and control system or to load the chair into a vehicle. A joystick is used to control the speed and direction of the chair, while a separate momentary switch is used for the linear actuator. Throughout the modeling process, stress analysis was performed using simulations in Inventor. Any necessary adjustments were made to ensure that none of the parts will fail, considering both failure theory and fatigue. Various grades of aluminum were selected for the majority of the manufactured parts, due to their corrosion resistance and light weight. The device is currently in the prototype manufacturing stage. If it is later marketed, a curb mounting device may also be included; this was decided against mainly due to cost and time restrictions. Space has also been left for a carrying basket, which will likely be added to the first prototype. The initial goal is to produce a single chair for our client, although the design may later be submitted for Medicare and ADA approval.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

Although global inflation and commodity prices are on the rise, spillovers to consumer price inflation in the People’s Republic of China (PRC) are expected to be limited. Consumer price inflation in the PRC has been driven mainly by domestic factors during the past decade, while commodity price shocks that led to higher producer costs hardly affected consumer prices. Reasons for these developments include a consumer basket of domestic products, anchored inflation expectations, and system buffers to absorb commodity price shocks. Though contagion risks of higher global inflation and commodity prices to inflation seem limited, possible transmission channels include further rising commodity prices and a shift in inflation expectations in the PRC. This note aims at providing policy recommendations on minimizing inflation transmission channels and containing inflationary expectations.