Central Bank Raises Inflation Estimate

August 5, 2005

THE Central Bank announced July 29that it has raised its estimated inflationrate for the year from 10% to 12.7%.Bank President Francisco de PaulaGutiérrez explained that the figure wasraised after reevaluating the economicindicators for the year. He said that higherthan expected oil prices and the risingcosts of consumer goods, especially coffeeand beef, were major factors.In addition, an unexpectedly highamount of foreign short-term investmentput more colones into the economy, causingconsumer prices to rise.The consumer price index – a measureof the average change over time in theprices paid by consumers for a basket ofbasic consumer goods and services – roseby 6.86% in the first six months of 2005,up from 6.86% over the same time periodin 2004.Gutiérrez said he expects familyincomes will not increase much this year,and that the poverty rate will rise.To combat inflation, the bank willcontinue a restrictive monetary policy,Gutiérrez announced. One tactic, heexplained, will be to raise interest ratesfor government bonds as a way to drawmore colones out of circulation.The bank will also continue with itspolicy of mini-devaluations of ¢0.15 daily.Preceding the announcement,Gutiérrez signed an agreement with theCentral American Economic IntegrationBank giving the Central Bank access toup to $150 million to reinforce itsreserves, if necessary.

Facebook Comments

You may be interested

A pilgrimage for a saint: El Salvador mourns
Central America
461 views
Central America
461 views

A pilgrimage for a saint: El Salvador mourns

AFP - March 25, 2019

Hundreds of Salvadorans paid tribute this weekend to their first saint, San Salvador Archbishop Oscar Arnulfo Romero, murdered 39 years…

News
319 views

The Tico Times Weekly Digest: March 25, 2019

Alexander Villegas - March 25, 2019

An indigenous land rights leader was murdered in his home, four cases of measles detected in Costa Rica and La…

Costa Rica Treatment Center tackles addiction differently
Costa Rica
653 views
Costa Rica
653 views

Costa Rica Treatment Center tackles addiction differently

The Tico Times - March 25, 2019

Costa Rica Treatment Center tackles addiction differently. While most drug and alcohol rehab centers shelter their clients from external stimuli,…