Inflation Down From Last Year

December 8, 2006

Accumulated inflation so far this year is down 4.6% over the same period last year, according to a statement from the National Statistics and Census Institute (INEC).

As the page turned to December, INEC reported an accumulated inflation rate of 8.33% so far this year, compared to 12.94% for the same period last year.

Last month, the consumer price index (CPI) shot up 1.01%, driven by increases in transportation costs, such bus fares and airplane tickets, and an increase in the price of food products such as tomatoes and eggs.

In August, INEC unveiled a modified CPI, a listing of 292 consumer goods (TT, Aug. 18). Economists eye the prices of those goods to understand the effects of inflation on the consumer. The new listing dropped obsolete goods such as candles and liver and replaced them with more modern goods and services such as cell phones and Internet connection.

After the new listing system was implemented, Costa Rica’s consumer price index took a dip in September, falling to –0.16%, the lowest this year. But the consumer price index has since begun to climb to an aboveaverage increase of 1.01% in November.

The Central Bank also implemented a new exchange rate system in mid-October in an attempt to give the Central Bank more leeway to control inflation (TT, Oct. 13).

According to the statement, the price of an airplane ticket increased 30% in November, and the price of a bus ride increased 6%, which had significant effects on the increase of the CPI. Also, the price of eggs increased by 7%, while the price of a tomato increased by 12%.

Though last year’s inflation rate was the highest in a decade, this year’s inflation rate so far is the second lowest in a decade.

 

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