Economy / Costa Rica
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Growth Slowdown Underway
July 2008 | Ratings UpdateSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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Rising inflationary pressures - and the increasing risk of prolonged unrest as consumer feel the pinch of higher living costs - remains the main downside threat to our short-term political risk ratings. Headline price growth edged up to 11.9% y-o-y in May (from 10.9% the previous month), marking a 20-month high for inflation. Higher prices have provoked the country's National Salary Council into hiking private sector minimum wages by 6.6% to US$346.40 a month in a bid to boost the purchasing power of households. We caution that this may not be enough, and indeed may be inflationary in itself. As