Costa Rica: Inflation slows to nearly one-year low
March 11, 2015
Consumer prices fell 0.17% in February over the previous month, contrasting January’s mild 0.04% increase. According to the Statistics Institute, the reading mainly reflects that lower prices for fuel more than offset higher prices for education, electricity and some food items.
Annual headline inflation fell from January’s 4.4% to 3.5% in February, the lowest reading since March 2014. As a result, inflation remains within the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 4.0% target. Annual average inflation inched up from January’s 4.6% to 4.7%.
The core inflation index, which strips out short-term fluctuations in the consumer price index, rose 0.22% in February over the previous month (January: +0.54% month-on-month). Annual core inflation receded from 4.2% in January to 3.8% in February.
On 11 March, the Central Bank announced that the Base Rate will stay at 7.15%, where it had been resting for one month and which represented the lowest level since 22 October 2014. From the end of May until October of last year, the Base Rate had 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.