Inflation in Costa Rica
Costa Rica - Inflation
Inflation accelerates in May and the Central Bank applies a raft of dovish measures
Consumer prices rose 0.14% in May compared to the previous month, down from April’s 0.56% increase. According to the National Institute of Statistics and Census, May’s increase was stoked by higher transport prices but weighed on by lower entertainment and culture prices.
Inflation accelerated to 2.3% in May, up from 2.1% in April, delving further into the Central Bank’s 2.0%–4.0% target range. Annual average inflation remained unchanged from April’s 2.0% in May.
On the monetary policy front, the Central Bank of Costa Rica slashed interest rates by 0.25 percentage points on 22 May, bringing the key policy rate down to 4.75% from 5.00%. The move was taken with an eye on low inflation in recent months and moderate inflationary expectations for the months ahead. In addition, on 3 June, the Central Bank reduced the minimum legal reserve requirements to be held by banks to 12.0% from 15.0% in a bid to shore up lending growth.
Inflation should pick up even further in the coming months, particularly given July’s switch to a value-added tax from a general sales tax, an expected economic growth acceleration and recent Central Bank monetary policy loosening. FocusEconomics Consensus Forecast panelists expect inflation to end this year at 2.8%, which is unchanged from last month's forecast, and 2.9% in 2020.
Costa Rica - Inflation Data
|Inflation Rate (CPI, annual variation in %)||5.2||4.5||0.8||0.0||1.6|
5 years of economic forecasts for more than 30 economic indicators.
Costa Rica Inflation Chart
Source: Costa Rica Central Bank and FocusEconomics calculations.
Costa Rica Facts
|Exchange Rate||585.3||-0.57 %||Jun 14|
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June 11, 2019
Annual economic growth in cyclically-adjusted terms slowed to 1.6% in April, which was down from March’s revised 1.8% growth (previously reported: +1.9% year-on-year) and represented the slowest expansion since November 2013. Economic activity growth in April was hampered by a struggling agriculture sector, activity in which has fallen every month since September 2018 but which fell 3.9% in April—the fastest decrease in over a decade, specifically since February 2009.
June 3, 2019
Consumer prices rose 0.14% in May compared to the previous month, down from April’s 0.56% increase.
May 10, 2019
Annual economic growth in cyclically-adjusted terms was unchanged in March from February’s revised 1.9% reading (previously reported: +1.7% year-on-year), according to the monthly index of economic activity published by the Central Bank of Costa Rica.
May 8, 2019
Consumer prices rose 0.56% in April compared to the previous month, contrasting the 0.14% fall in March.
Costa Rica: Dry weather holds back economy in February as agriculture output drops for fifth month running
April 10, 2019
Annual economic growth in cyclically-adjusted terms was unchanged in February from January’s revised 1.7% reading (previously reported: +1.6% year-on-year), according to the monthly index of economic activity published by the Central Bank of Costa Rica.