Costa Rica: Inflation eases in August
September 3, 2013
Consumer prices rose a meager 0.05% over the previous month in August, which was well below July's 0.34% increase. The virtually flat reading was the result of higher prices for alcoholic beverages and cigarettes as well as for housing, which offset lower prices for food and non-alcoholic beverages.
Annual inflation fell from 5.8% in July to 5.3% in August. Annual average inflation remained unchanged at July's 5.4% rate, which marks the highest level in more than two years. Thus, inflation remains within the Central Bank's tolerance margin (plus/minus 1.0 percentage points) around its 5.0% target.
The core inflation index, which strips out short-term fluctuations in the consumer price index, rose 0.09% over the previous month in August (July: 0.31%). Annual core inflation inched down from 2.7% in July to 2.6% in August.
According to July's revised edition of the Macroeconomic Program 2013-2014, the Central Bank intends to maintain the inflation target of 5.0% with a tolerance margin of plus/minus 1.0 percentage points for 2013 and 2014. FocusEconomics panelists see inflation ending the year at 5.0%, which is up 0.1 percentage points from last month's forecast. The panel sees year-end inflation at 4.9% in 2014.