Despite efforts by the Central Bank to keep inflation at bay, the consumer price index (CPI) in Costa Rica reached its highest level in six years during August. According to a report by Marcos Gonzalez of La Prensa Libre, the current CPI stood at 5.44 percent last month, up from 5.09 percent in July. Furthermore, this is the second month the CPI escapes the containment attempts by the Central Bank, which had planned to keep inflation between 3 and 5 percent this year.

 

The National Institute of Census and Statistics (Spanish initials: INEC) is the government agency in charge of releasing CPI calculations in Costa Rica. With regard to the goods and services that have increased the most in terms of prices, the INEC reports the following:

 

• Groceries 1.59 percent
• Health services 0.40 percent
• General consumer goods 0.38 percent

 

Two economists interviewed by La Prensa Libre earlier this year had correctly forecast a CPI between 5 and 6 percent, and they cited pressure by the monetary policy conducted by the United States Federal Reserve; specifically the reduction in stimulus to the national economy of that North American nation.

 

Some goods have actually decreased in price due to conservative spending by consumers in Costa Rica. Cigarettes, footwear, and alcoholic drinks are among the goods showing price reductions as inflation continues to rise.

 

As recently reported by The Costa Rica Star, consumer confidence in our country is currently at a very low level and financial pessimism abounds. This will certainly be a contentious issue for President Luis Guillermo Solis, who was recently criticized for delivering a 100-day report that was high on blame and low on hope for the economic future of the nation. To add fuel to the fire, the prime lending rate rose to 7.15 percent, which means that borrowing money and paying down credit cards has become even more difficult.