Costa Rica Post

Pura Vida, Every Day
Wednesday, Jan 22, 2025

Costa Rica Closes 2024 with Positive Inflation: Key Price Shifts Analyzed

Inflation in Costa Rica rises by 0.84% in 2024, marking a turn from recent negative trends.
Inflation in Costa Rica, as gauged by the year-on-year Consumer Price Index (CPI), culminated in 2024 with a positive reading of 0.84%, according to data from the National Institute of Statistics and Censuses (INEC).

This marks a significant reversal from the predominantly negative values observed in 16 of the past 20 months.

The Banco Central de Costa Rica (BCCR) had established a tolerance range of 2% to 4%, with a central target of 3%.

Since August 2022, when the CPI peaked at 12.13%, the index began a downward trajectory, entering negative territory by June 2023.

By August 2023, the index bottomed at -3.28%.

Brief positive spikes in July and August of 2024 failed to hold, with values turning negative again in September, October, and November.

José Luis Arce, an economist and Director of Analysis and Strategy at CFS Capital, emphasized that the prolonged negative numbers should not be construed as a deflationary period.

Instead, it was a benign reduction in prices spurred by a favorable external shock in raw materials and terms of trade.

Arce remarked, “Just as international commodity price increases raised Costa Rica's inflation in 2021 and 2022, their decline and future forecasts are expected to exert downward pressure on local inflation in 2025.”

The products contributing most significantly to the annual CPI increase were potatoes with a 147.52% surge, mobile phone services at 10.3%, electricity by 8.67%, and housing rent rising by 4.38%.

Conversely, gasoline prices fell by 11.4%, telecommunications package services by 10.62%, cooking oil by 23.85%, diesel by 19.68%, and new automobile prices by 2.94%.

Nelson Castillo, head of the INEC Consumer Price Index Unit, explained how sectors like 'Food and Non-Alcoholic Beverages' (up by 2.6%) and 'Housing and Utility Services' (up by 4.91%) accounted for the largest portions of the CPI increase.

Meanwhile, a 4.48% drop in 'Transport' cushioned these increases.

Castillo pointed out that the highest-weighted segment is food and non-alcoholic beverages, constituting 24.32% of total household spending, playing a crucial role in mobility of the index.

The CPI is composed of 289 goods and services, where some products have greater weight due to higher consumption levels among Costa Rican households.

According to Arce, price hikes hit lower-income families the hardest, given their association with essential goods like food and beverages.

Nevertheless, Arce considered that these increases are temporary and expected to reverse soon.

Additive complexities include specific market dynamics for each product.

Factors affecting price changes range from environmental conditions and production seasons to the presence of pests in fresh foods, influencing supply and demand.

Castillo noted the impact of the exchange rate on U.S. dollar-denominated goods, such as airfares and new vehicles, which are adjusted to colones based on the Central Bank's reference rate—indicative of the direct impact of a rising U.S. dollar.

On a monthly basis, the index increased by 0.94% in December compared to November.

INEC highlighted that this represents the highest monthly variation in the last five years for December.

During this period, 44% of items saw a price increase, 38% saw a decrease, and 18% showed no change.

Such dynamics underscore the complexity of household spending influences amid ongoing economic pressures.
Newsletter

Related Articles

0:00
0:00
Close
Five Billionaires on Track to Break One Trillion Dollar Wealth Barrier
Celebrity Responses to California Wildfires: Charity, Criticism, and Controversy
Saprissa Withdraws from Costa Rica's Women's Soccer First Division, Sparking Debate and Concern
Miguel Herrera: Farewell Video from Fox Sports as He Takes on Costa Rica National Team
Controversial Reappointment: Costa Rican President Rodrigo Chaves Names Marta Esquivel as Planning Minister
A Long Battle Ends in Tragedy for Shooting Victim in Costa Rica
Triple Homicide in Los Chiles: Couple and Five-Year-Old Girl Fatally Shot
Horacio Elizondo Resigns Irrevocably from Costa Rica's Football Federation Amidst Controversy
Costa Rican Digital Vehicle Licensing Bid Faces Another Setback
Convict Recaptured After Brief Escape from La Reforma Prison Complex
José Giacone: Confident in Saprissa's Enhanced Competitiveness This Season
Costa Rican President Rodrigo Chaves Considers Shift to Congressional Leadership
Pope Francis Praises Costa Rican Coffee as the World's Best
Former Honduran General Hospitalized Ahead of Protest Death Trial
Miguel 'Piojo' Herrera Appointed as Costa Rica's National Team Coach
Mónica Taylor Appointed as New President of Costa Rica's Social Security System
Davivienda Acquires Scotiabank's Operations in Latin America
California Wildfires Set to Become Costliest in U.S. History
US Court Ruling Signals Potential Sale of Silk Road's Bitcoin Stash
Leadership Changes Mark New Beginnings in Costa Rica's Public and Private Sectors
Meta Shifts Content Moderation Strategy: Context Notes to Replace Fact-Checking in the U.S.
Costa Rica Closes 2024 with Positive Inflation: Key Price Shifts Analyzed
Cessna Aircraft with Drug Traces Discovered on Clandestine Airstrip in Guanacaste
Tragic Incident as Man Found Dead After Being Swept Away by River in Limón
Elderly Man Severely Burned in Parrita House Fire Blocked by Motorcycle
Elusive Criminal ‘Diablo’ Continues to Evade Capture and Justice
Francisco Rodríguez Transfers from Herediano to Santos de Guápiles
Washington Ortega Embraces Pressure at Alajuelense
Alejandro Bran and Aarón Salazar Eager to Contribute to Alajuelense’s Success
Andrés Carevic Emphasizes Results Above Style at Cartaginés
Chaves Administration Faces Scrutiny Over Increased Emergency Decrees
Óscar Izquierdo Withdraws from PLN Presidential Primary Consideration
Sofía Guillén to Sue TikToker Over False Video Allegations
Mónica Taylor Hernández Appointed as New Head of Costa Rica's Social Security Fund
Understanding Human Metapneumovirus: Recent Outbreaks and WHO's Stance
Costa Rica Unveils Ambitious Mental Health Strategy for the Next Decade
Key Dates Announced for University Admissions at UCR and UNA
Costa Rican White-Faced Monkeys Face Climate Change Impacts
Davivienda's Strategic Expansion: Understanding the Legacy of Grupo Bolívar and the Cortés Family
Nvidia Surpasses Moore's Law: Driving Down AI Costs
Rising Incidents of Property Theft Reflect Larger Security Issues in Costa Rica
Costa Rica's San José Airport to Introduce Electronic Immigration Gates
Safe Landing of Light Aircraft Averts Potential Disaster at Punta Banco
Robert Garbanzo Responds to Allegations from Herediano Defender Keyner Brown
Washington Ortega: The New Guardian of Alajuelense's Goal
Costa Rican Footballer Manfred Ugalde Catches PSG's Eye
Jefry Valverde's Ambitions: Returning to Prominence in Saprissa
Search for Missing Fisherman to Resume on Friday in Costa Rica's Tempisque River
Melania Villalta Sets a New Standard for Online Engagement: Zero Tolerance for Inappropriate Comments
Little Caesars Pizza Chain Seeks Talent Across Multiple Locations
×