Costa Rica: Inflation holds steady in August, while the Central Bank leaves rates unchanged on 21 August
September 6, 2019
Consumer prices fell 0.1% in August compared to the previous month, contrasting the 0.7% jump in July, which was a three-and-a-half year high and due to the introduction of an expanded VAT in the month. August’s decrease was partly due to lower food and non-alcoholic beverage prices.
Inflation in August was unchanged at July’s 2.9%, staying close to the 3.0% midpoint of the Central Bank’s 2.0%–4.0% target range. Annual average inflation ticked up to 2.2% from 2.1%.
On the monetary policy front, the Central Bank left the key policy rate unchanged at 4.00% on 21 August amid contained inflationary pressures, after cutting it for the third time this year by 0.25 percentage points on 22 July.
Author: Edward Gardner, Economist