Costa Rica: Inflation exceeds Central Bank target
July 4, 2011
In June, consumer prices rose 0.56% over the previous month, which was below the 0.67% price increase registered in May. According to the National Statistics Office (INEC, Instituto Nacional de Estadistica y Censos), higher prices for transport (+1.94% month-on-month) as well as for housing (+0.87% mom) offset lower prices for food and nonalcoholic beverages (-0.14% mom). Annual inflation stepped up from 4.8% in May to 5.2% in June, overshooting the Central Bank's 5.0% inflation target and marking the highest level since December 2010. Meanwhile, the core inflation index, which smoothes short-term fluctuations in the consumer price index, added 0.13% in June. As a result of the subdued price increase in June, annual core inflation remained unchanged at May's 4.6%. According to the Revision of the Macroeconomic Program 2011-2012, the Central Bank maintains an inflation target of 5.0% for 2011, with a tolerance margin of 1.0 percentage points and a target of 4.0% for 2012.