QCOSTARICA — Defining expenses well to cover their basic needs will be the priority of Costa Rican families in 2024, because they will feel a contraction in consumption, generated by the rise in the prices of goods and services and lower economic growth.
Inflation will return to the target range established by the Banco Central de Costa Rica (Central Bank), this means that it will remain at more or less 3% at the end of the year and that will undoubtedly affect the pockets of Costa Ricans who perceived low prices throughout last year.
Starting in January, the upward path began after approving an increase of up to 15% in electricity rates by the regulatory authority, the Autoridad Reguladora de Servicios Públicos (Aresep).
“It is anticipated that inflation will be able to transition from its current state of deflation and align itself with the desired range by 2024. The exact timing of this shift, however, remains uncertain,” said Fernando Rodríguez, an economist at the Universidad Nacional (UNA).
“Financial institutions and specialized analysts project somewhat lower growth for the world economy this year. If this forecast materializes, the boost to our economy that comes from abroad would diminish. Domestically, I see a couple of additional potential brakes on domestic economic activity this year: high interest rates for loans in the financial system and the appreciation of the exchange rate that will take its toll on the dynamism of the export sector this year,” said Alberto Franco, an economist at Ecoanalysis
Lower fiscal growth, insecurity, social tensions and exchange rate volatility are some of the challenges faced. These risks and others such as the possible rise in international interest rates suggest that the outlook for 2024 would change due to geopolitical risks and the imminent rise in imported goods, as a result of a crisis in local supply chains, which will cause inflation to rise and therefore erode economic growth.
These conditions suggest that 2024 will be a difficult year.
