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Fiorella Baptista
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Will inflation in Costa Rica be above 4% for 2023?
a year ago

In recent years, Costa Rica's inflation trends have shown notable volatility. Most notably, the inflation rate saw a significant jump from 1.73% in 2021 to 8.27% in 2022. Historically, the data reveals patterns where, after a period of declining inflation, rates stabilize or show slight rebounds. This historical context provides a framework for anticipating future movements. Furthermore, monthly inflation data for the last year show an upward trend, with September marking an increase of 0.11%, contrasting the decrease in the previous month. It is also essential to consider the average inflation rate over a decade, which stands at 4.27%, suggesting that rates above 4% have been common.

Adding another layer to this analysis is the relationship between unemployment and inflation. A decline in unemployment often implies potential inflationary pressures due to rising wages and increased consumer spending. Given the notable drop in Costa Rica's unemployment rate, this dynamic further supports potential inflationary pressures for next year. Taking all of these factors into account, it seems statistically plausible that Costa Rica's inflation rate for 2023 could surpass the 4% mark. However, such forecasts carry inherent uncertainties, as multiple economic factors will influence the outcome.

https://www.macrotrends.net/countries/CRI/costa-rica/inflation-rate-cpi

https://tradingeconomics.com/costa-rica/unemployment-rate#:~:text=5%2DYear%20Low-,The%20unemployment%20rate%20in%20Costa%20Rica%20fell%20to%209.6%25%20in,year%20earlier%20to%20224.9%20thousand.

https://www.focus-economics.com/countries/costa-rica/news/inflation/consumer-prices-falls-at-softer-pace-on-an-annual-basis-in-september/#:~:text=The%20trend%20pointed%20down%2C%20with,the%20highest%20reading%20since%20January.