The Costa Rican capital of San José has been flagged as one of the global cities with the most rapidly increasing cost of living over the past year, according to the 2023 Worldwide Cost of Living report by The Economist.
Among 170 cities surveyed across the world, San José experienced the third-largest price hike behind only Aguascalientes and Santiago de Querétaro in Mexico. On the report’s cost index, San José registered a score of 67 this year, rocketing up 38 spots from 2022 to rank 70th most expensive overall.
Across categories measuring grocery prices, transportation, utilities, and more, costs ticked upwards nearly across the board for those living or operating in San José throughout 2022. And while certain product prices did see decreases, the drops were deemed insufficient by Economist analysts to offset broader inflationary pressures.
The report particularly highlights the failure of central banks, including Costa Rica’s, to curb swelling prices through mechanisms like interest rate hikes intended to ease currency appreciation. This has led to the Costa Rican colón posting gains against dominant currencies like the US dollar.
Latin American cities collectively saw some of the highest year-on-year price increases globally, with locales in the region climbing 13 positions on average. Although San José’s ascent was more dramatic than most, other Latin American metro areas also dot the top-10 list of cities with surging costs.
Along with Mexican neighbors to the north, places like Montevideo, Uruguay and Lima, Peru rank among the priciest urban centers in the Americas. Globally, perennial stalwarts Singapore, Zurich and New York remain the world’s most expensive cities for day-to-day living.
While the report cites gradually slowing utilities inflation resulting from geopolitical developments in 2022, grocery costs are predicted to continue their upward trajectory in the year ahead across Latin America and beyond.
For local consumers and expatriates residing in San José, expectations of any cost-of-living relief remain muted. And with the city swiftly ascending the global rankings, what once passed for affordable will likely soon become a luxury.
