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Rica's annual inflation drops to 2.29%

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Published on Wednesday, August 9, 2023
By the A.M. Costa Rica staff

The National Institute of Statistics reports that inflation in Costa Rica has decreased and is currently at 2.29%.

This figure depicts the average Consumer Price Index study results from August 2022 to July 2023.

In July of this year, the inflation rate decreased by 0.19%.

The total inflation rate for this year, from January to July, is currently at 1.70%.

Experts analyzed 289 products and services to calculate inflation. Out of these, 44% saw a rise in prices, including mobile phone services and electricity, among other things.

Out of all the products that were examined, 39% of them experienced a price decrease. This includes items like tourist packages and gasoline.

All other products included in the study displayed no price differences.

The inflation rate at present stands at 2.29%, which is lower than the Central Bank's projection of 3%.

The month with the highest inflation rate in Costa Rica was August 2010, reaching a level of 12.3%.

According to experts, low inflation refers to a situation in which the general level of prices for goods and services in an economy is rising at a relatively slow rate. 

In other words, the rate of increase in prices is modest or minimal over a certain time. 

Low inflation is often seen as a positive economic condition because it indicates stability in the purchasing power of money and helps to promote economic growth and consumer confidence.

Central banks and economists often set target inflation rates for economies to achieve. These targets are typically low, usually around 2% per year, for developed economies. This low but positive inflation target is considered desirable because it allows for some price flexibility while preventing the negative effects of deflation (falling prices) or high inflation (rapidly rising prices).

While low inflation is generally considered favorable, extremely low inflation rates or prolonged periods of deflation can also have negative consequences, such as slowing economic activity and increasing the burden of debt. As such, central banks aim to strike a balance between maintaining price stability and ensuring economic growth.

What is the rate of inflation in your country? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com

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