Q COSTA RICA – The Central Bank of Costa Rica (BCCR) announced on Monday, July 31, that inflation will not return to the target range of 2-4% by the end of 2023, as previously thought, but rather by the third quarter of 2024.
This was due to a greater-than-expected inflationary shock in April, when inflation was 2.44%, the bank expected that this indicator would fall below the range during the third quarter and return towards the end of 2023.
In June, the interannual variation of general inflation fell to -1.04%, below the bank’s range, which is between 2% and 4%.
Subjacent inflation, which does not take into account energy prices or certain foods, is expected to return to the target range in the first quarter of 2024.
The BCCR reiterated its commitment to price stability and indicated that its monetary policy would be based on prospective analysis.
“The Board of Directors of the BCCR reiterates its commitment to price stability as a necessary condition for macroeconomic stability and, consistent with this, maintains the medium-term inflation target at 3%,” says the report.
“Based on this analysis, it will make the necessary adjustments in its reference interest rate, in order for inflation to be located at values close to the goal in the horizon of its macroeconomic programming,” it indicates.
Despite inflation remaining outside the target range for the rest of 2023 and part of 2024, the president of the BCCR, Roger Madrigal, defended the measures that were taken and other external factors, such as reductions in fuel, maritime transport and some basic food prices, that favor this behavior.
In addition, Madrigal commented that there are other elements that favor this behavior, but that are external, such as the reduction in the price of fuel, maritime transport and some basic foods.