Costa Rica: Inflation recedes in January; moves back into target range
February 11, 2015
Consumer prices rose 0.04% in January over the previous month, contrasting December’s 0.21% decrease. According to the Statistics Institute, the reading mainly reflects that higher prices for education and for food and non-alcoholic beverages more than offset lower transport prices.
Annual headline inflation fell from December’s 5.1% to 4.4% in January, the lowest reading since May 2014. As a result, inflation moved back into the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 4.0% target. Annual average inflation inched up from December’s 4.5% to 4.6%.
The core inflation index, which strips out short-term fluctuations in the consumer price index, rose 0.54% in January over the previous month (December: +0.12% month-on-month). Annual core inflation came in at 4.2%, matching December’s print.
On 11 February, the Central Bank announced that the Base Rate will be at 7.15%, the lowest level since 22 October 2014. Since the end of May last year, it has followed a slight overall upward trend before being rather stable at 7.20% to 7.25% from 23 October 2014 to 11 February 2015. 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.