Inflation Surges, Now Approaching 16%

October 10, 2008

Prices have surged 15.77 percent during the past 12 months, the highest year-overyear increase since 1998, according to a report by the National Statistics and Census Institute (INEC).

Food and non-alcoholic beverages became 27.7 percent more expensive, hurting low-income families who tend to spend a large percentage of their paycheck on food. Transportation costs increased 19 percent, while checks at restaurants went up 18.8 percent.

Of the 292 goods and services used to measure the consumer price index, 68 percent increased in price, while 23 percent became cheaper and 9 percent stayed the same. Compared to September 2007, consumers are now paying 70 percent more for beans, 56 percent more for eggs and 53 percent more for rice.

Last month alone, prices increased 0.95 percent, the highest September increase since 1999. The Central Bank estimates 2008 inflation will be 14.2 percent, significantly higher than its stated goal of about 8 percent.

In a July survey by CID-Gallup for the daily La República, 34 percent of respondents said high living costs were their main worry. Some 43 percent said they have started skipping a meal to cut back on costs.

Nearly 60 percent are buying less red meat, 38 percent are cutting back on rice, and 33 percent are buying fewer beans.

These three food groups make up the casado, a typical dish that many Ticos eat daily. Ticos don t expect life to get any easier: Nearly half of survey respondents said they thought their families economic situation would worsen in the next year.

High prices threaten to push more Ticos over the poverty line, reversing a reduction in poverty and unemployment from July 2006 to July 2007. New numbers will be released later this month.

Gillian Gillers

 

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