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Saturday, December 2, 2023

Is Costa Rica Expensive? An Expats Point of View

The most common question I am asked by people thinking of visiting or moving here is, “How expensive is Costa Rica?” My stock answer is “It depends”. Compared to the rest of Central America– yes, without doubt Costa Rica is the most expensive destination in the region. Compared to most major urban areas of North America, it is a bargain. It’s all relative.

A while back, my son and daughter-in-law were visiting. At that time they lived in the expensive LA area and were commenting on how reasonably priced were the restaurants at the marina. For locals who earn much less than the average US urban dweller, the same prices would be out of reach. There are some things within our local economy that make no sense.

I sometimes buy a beer imported from Spain that costs 300 colons less than a can of Costa Rican beer. This fact always confuses me. How does a product made in Spain, shipped across the ocean to Central America, then trucked to the store cost so much less than the same product, with a similar taste and alcohol content, brewed right here at home?

And when I was in the US last year, I saw a 6-pack of Imperial for $3.99. Here that same sixer costs nine or ten US dollars in colons. Owning a car and driving is more expensive here than anywhere else in Central America. Part of this expense is due to Recope, the state company created more than 50 years ago whose stated mission is to ensure the supply of fuels.

Note that Recope is an acronym, and the RE part stands for refinery. For most of my years in Costa Rica, we have had no working refineries. At one point about ten years ago, the Limon refinery was shut down, yet 350 full time employees were kept on at full pay, doing nothing. Recope has over 1,700 employees at present, all collecting paychecks and contributing to the highest gasoline prices in the region. Cars are also expensive due to burdensome taxes.

I still remember buying a used Pathfinder here for $6,000 and the same year traveling to the US and seeing the same make and year for under $2,000. In the past year we have an added whammy for everyone who works in the dollar economy.

The exchange rate (tipo de cambio) has plunged about 15 percent from the previous stable rate, and over 20 percent from the peak, which was during the pandemic, when everything was a bit skewed. (I have a friend who suggests that everyone with dollars in the bank here should do a bank run and hold all of our dollars ‘hostage’ until the rate goes back up). I am not an economist, but find it strange that the colon should continue to flex so much muscle against the world’s most circulated currency. Not all is expensive here.

That overpriced car can be repaired and serviced at costs a fraction of what it is in the states. Most types of labor, even skilled labor will be easier on your wallet. And of course our medical and dental costs are so inviting to foreigners that an entire sector, medical tourism, has been built in support. Most of us choose to live here for reasons beyond the cost of living. Beautiful beaches, stunning mountains, wild rivers, an amazing array of delicious foods that grow from the ground are but a few of the reasons.

I have a joke I tell on myself. When people ask me why I came to Costa Rica, I respond, “I can tell you why I did not come here–I did not come here to get rich. And I have stayed true to my word!” In other words– maybe this isn’t the place to be if your money and your budget is of primary importance in your life. Consider our bipolar economy part of the price of living in paradise

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