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Wednesday, June 29, 2022

In Costa Rica, Rising Cost of Living Impacts Thousands of Families

Due to the increase in the cost of living, 138,000 families will not have sufficient income to purchase the basic food supply, according to the Association of Economic Sciences of Costa Rica.

In addition, 33000 additional households would fall into extreme poverty; although the real impact will be measured when the results of the National Household Survey are analyzed.

“In recent months the country experienced a significant increase in inflation, which surpassed historical limits in the last decade, which means the increase in prices of the basic food products and the reduction of the purchasing capacity of the population,” explained Ennio Rodriguez, President of the Association of Economic Sciences of Costa Rica.

“This is particularly worrisome for households in the lower-middle and low-income quintiles (40% of the population), which are very sensitive to changes in the relative prices of goods and services,” stated Rodriguez.

Furthermore, many people have lost their jobs as a result of the pandemic, which further complicates the panorama.

“Targeted contingency policies must be implemented, through an increase in conditional cash transfer programs, to reduce extreme poverty and poverty in general, and to obtain international financing as soon as possible to alleviate the effects of the crisis on the most vulnerable households in society,” concluded the president of the Association of Economic Sciences of Costa Rica.

The consequences of the war between Russia and Ukraine have also affected Costa Rican households. Gasoline prices have increased significantly, making the cost of living in the country even more expensive and contributing to the crisis.

According to the Association, the new government is called upon to take immediate measures to reactivate the economy in order to promote employment, with an emphasis on women and young people.

“2022 should be a turning point between a fragile Costa Rican economy and into a resilient one that harnesses its potential. There are fundamental aspects that will be decisive for economic growth in the coming year, such as the immediate reactivation measures the new government promotes during its first months of administration,” the economists affirmed.

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