Caribbean & Central America - January 2012 (ISSN 1741-4458)

Inflation: In 2011 inflation closed at 4.74%, giving Costa Rican authorities a cause to celebrate - 2011 became the third consecutive year in which real inflation came in below the central bank’s target (5%) – an achievement not attained since the 1976-1978 three-year period. For 2012, the central bank’s inflation target is 4% (+/- 1%). While transport was the sector that registered the highest increase in the consumer price index, reaching 7.1% by year end, the communications sector registered a decrease in prices of 0.44%. Experts attribute this to the opening up of the sector for competition.

Fiscal deficit: In December 2011, the International Monetary Fund (IMF) noted that for the second year running, Costa Rica would post Latin America’s highest fiscal deficit in GDP terms. The IMF’s estimate put Costa Rica’s deficit at 5.6% of GDP; Finance Minister Fernando Herrero, however, estimated it would come in slightly lower, at 5% of GDP.