Central Bank Revises 2009 Inflation Rate, Again

In a new revision of the bank’s economic outlook, the Central Bank of Costa Rica (BCCR) announced Wednesday that the country’s annual inflation rate for 2009 likely will reach 4 to 6 percent by year’s end.

This is the second adjustment of the BCCR’s Macroeconomic Program for 2009-2010, after a first revision in May that predicted inflation at 8 percent for the year, down from the initial January forecast of 9 percent.

Prices from January to June rose 1.21 percent, well below the 6.5 percent registered during the same period of 2008, and the lowest rate since 1971.

Given an anticipated recovery of presently sluggish global economic conditions, the Central Bank predicts prices will rise more quickly in upcoming months.

BCCR Executive President Francisco de Paula Gutiérrez also indicated that the gross domestic product (GDP) is expected to finish the year with a 1.3 percent loss, a slight improvement from the prediction in May of a 1.8 percent loss.

GDP through the first six months of the year was down 4.9 percent compared to the same period in 2008. It was also estimated that in 2010, GDP will increase by 2.6 percent.

–Adam Williams

The BCCR’s Macroeconomic Program for 2009-2010 is available at its Web site: www.bccr.fi.cr/flat/bccr_flat.htm