Costa Rica has been experiencing an increase in poverty and inequality, according to a recent report by the World Bank. The study, titled “The Potential for Integration: opportunities in a changing global economy,” shows that Costa Rica has experienced the largest increase in poverty and inequality in a five-year period from 2017-2022.
The report states that poverty in Costa Rica increased by at least 2.3 percentage points over the five-year period, which is higher than that recorded in the same period by its Latin American neighbors. The World Bank estimates that an estimated 5.5 million people have fallen into poverty in the region, where the policy response “is dominated by subsidies and price controls, taxes and social assistance.”
The Research Institute in Economic Sciences of the University of Costa Rica (IICE-UCR) found that by the end of 2022, the number of poor households in the country could have reached 24% or 25%, which is slightly higher than the 23% reported by INEC in November 2022. INEC estimated that 399,439 Costa Rican households were poor, with 110,631 in the extreme poverty category and another 288,808 in the poverty group.
In addition, the report describes an increase in the Gini Coefficient in Costa Rica, which is an indicator through which inequality is calculated in each country. The variation registered was 0.1, which is also higher than the average for Latin America.
According to economists, the rising costs and lower income are causing more households to fall into poverty. They suggest that the country should focus on job creation, especially for the most vulnerable groups. The director of the IICE-UCR, Juan Robalino, stated that “the cost of living for people has increased significantly. This means that many more families cannot acquire what is required to make a decent living.”
It is clear that Costa Rica needs to address the issue of poverty and inequality urgently. The government should focus on creating more job opportunities and improving the economy to reduce poverty levels. In addition, there should be policies put in place to reduce inequality and ensure that everyone has access to basic necessities such as food, housing, and healthcare.
It is essential for the government and the private sector to work together to tackle the issue of poverty and inequality in Costa Rica. The country has a lot of potential, and with the right policies and initiatives, it can create a brighter future for its citizens.