Costa Rica: Inflation rises to over one-year high
November 5, 2014
Consumer prices dropped 0.29% in October over the previous month, which came in slightly below September’s 0.14% decrease. The print marked a second drop after 11 consecutive increases. According to the Statistics Institute, the reading mainly reflects falling prices for electricity and some food items.
Annual headline inflation jumped from September’s 5.2% to 5.7% in October, the highest result in 15 months. As a result, inflation moved further above the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 4.0% target. Annual average inflation inched up from September’s 4.1% to 4.2%.
The core inflation index, which strips out short-term fluctuations in the consumer price index, rose 0.30% over the previous month in October (September: +0.12% month-on-month). Annual core inflation came in at 4.0%, which was slightly above September’s 3.9%.
On 5 November, the Central Bank announced that the Base Rate will remain at 7.20%, which represents the highest level since March last year. Since 9 October, the rate has been resting at the current level with the exception of a one-week interruption, when it fell to 7.15%. 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.