Costa Rica: Inflation moderates in December
January 5, 2011
In December, consumer prices increased 0.74% over the previous month, which was above the 0.66% price increase registered in November. According to the National Statistics Office (INEC, Instituto Nacional de Estadistica y Censos), higher prices for food and non-alcoholic beverages (+1.97% month-on-month) as well as for alcoholic beverages and tobacco (+1.27% mom) drove the December increase. Despite the pronounced month price increase, annual inflation dropped from 6.1% in November to 5.8% in December. At the current level, the figure exceeded the Central Bank's 5.0% inflation target but remained within the 1 percentage points tolerance margin. The core inflation index, which smoothes short-term fluctuations in the consumer price index, added 0.66% in December, pushing annual core inflation to 3.5%, up from 3.3% in November. According to the Revision of the Macroeconomic Program 2010-2011 from July, the Central Bank maintains an inflation target of 4.0% for 2011 with a tolerance margin of 1 percentage points.