Costa Rica: Inflation closes 2014 above Central Bank's target range
January 14, 2015
Consumer prices fell 0.21% in December over the previous month, contrasting November’s 0.34% increase. According to the Statistics Institute, the reading mainly reflects lower prices for transport.
Annual headline closed 2014 at 5.1%, which was notably up from 2013’s 3.7% but below November’s 5.9%. As a result, inflation sits slightly above the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 4.0% target. Annual average inflation inched up from November’s 4.4% to 4.5%.
The core inflation index, which strips out short-term fluctuations in the consumer price index, rose 0.12% over the previous month in December (November: +0.18% month-on-month). Annual core inflation came in at 4.2%, matching November’s result.
On 14 January, the Central Bank announced that the Base Rate will be at 7.20%; before it had been at 7.25%. Since August, when the rate stood at 6.95%, it has followed a slight overall upward trend. The Base Rate, which constitutes the main reference rate for loans and investments, is calculated by the Central Bank as a weighted average of the rates given for deposits by financial institutions for maturities of between 150 and 210 days.