Despite the decrease in overall inflation, many Costa Ricans still find household food prices high. A study from the College of Economic Sciences of Costa Rica revealed that the decline in prices for the Basic Food Basket (CBA) has not kept pace with the broader inflationary drop measured by the Consumer Price Index (IPC). While the inflation for the IPC reached 12.1% in August 2022, the CBA’s value doubled to 24%.

Luis Vargas, an economist from the College, noted that the CBA’s more gradual price reduction has significantly affected household budgets, especially during monthly purchases. This impact has been especially pronounced for low-income households, who, as of June 2023, still faced an annual inflation rate of 1.6%. In contrast, inflation for high-income households was recorded at -2.9% during the same period.

The study further highlighted the varying inflation effects across income strata. Food and non-alcoholic beverage inflation has a more significant impact on poorer households, while the reduction in transport costs due to falling fuel prices benefits them less. Additionally, the rise in rent prices in recent years has majorly affected middle and low-income households. In terms of income, 2022 saw real incomes across all levels lower than in 2019, but there was a recovery from the lows of 2020.

CRHOY – https://www.crhoy.com/economia/reduccion-de-canasta-basica-es-menor-que-caida-de-inflacion/