Costa Rica's inflation goal probably not achievable

12 November 2007

Costa Rica’s inflation goal probably not achievable

Posted by richardb under: Economy & Politics .

Previous years in Costa Rica have seen inflation rates above 10% and at some points above 20%. In 2006 Costa Rica unhinged itself from the USD and allowed the Costa Rican Colon rate to be dictated by the Central Bank of Costa Rica. Before Costa Rica had seen great devaluation of its currency which meant an increase in inflation from year to year.

This year however the goal was set to be 8% which was seen as an attainable goal however lofty. This week the President of the Banco Central de Costa Rica (BCCR) stated that they would probably not reach this goal as currently inflation is above 8% and will probably finish the year at 9%.

However Francisco de Paula Gutierrez (President of BCCR) stated that inflation was still the main objective of the Banco and its monetary policy.

The Bank stated that there are many reasons for the inflation goals not being hit, such things as rising oil prices, strong Euro have not helped matters. However it appears the Costa Rican economy is doing well and will continue to get stronger and grow.

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