Costa Rica: Inflation remains above Central Bank target
August 4, 2011
In July, consumer prices rose 0.34% over the previous month, which was below the 0.56% price increase registered in June. According to the National Statistics Office (INEC, Instituto Nacional de Estadistica y Censos), higher prices for food and non-alcoholic beverages (+0.67% month-on-month) as well as for housing (+0.74% mom) offset lower prices for clothing and footwear (-0.24% mom). Despite the monthly increase, annual inflation remained unchanged at June's 5.2%, overshooting the Central Bank's 5.0% inflation target and marking the highest level since December 2010 for the second month. Meanwhile, the core inflation index, which smoothes short-term fluctuations in the consumer price index, added 0.44% in July. As a result of the price increase in July, annual core inflation rose to 4.8% from 4.6% in June. According to its 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.