As the second half of the year begins, a stable dollar exchange rate, caution regarding interest rates, and the impact of fuel prices on inflation are expected to shape the end of the year, according to Federico Quesada Chaves, director of the School of Management Sciences at the National Distance Education University (UNED).
The expert also notes that geopolitical conflicts, the El Niño phenomenon, and potential tax changes are among the main risks to inflation and the cost of living, which is why people should increase their savings and avoid high-risk investments.
“Under current conditions, the exchange rate is expected to remain relatively stable between June and October, and even into early November; thereafter, downward pressure could emerge due to the seasonal inflow of foreign currency associated with the payment of year-end bonuses and other incentives,” Quesada explained.
Regarding monetary policy, the economist believed that the Central Bank of Costa Rica (BCCR) would follow a similar course to that of the U.S. Federal Reserve, which would allow it to maintain a monetary policy rate close to 3.5%, with occasional increases only if extraordinary inflationary pressures materialize.
This would mean that interest rates on loans and credit cards would remain largely unchanged, while Costa Rica would continue to be a magnet for dollar inflows.
“Interest rates are expected to remain stable over the coming months. Only a significant rise in imported inflation would justify adjustments to levels close to 3.75%,” he said.
Regarding fuel prices, the director of the School of Management Sciences explained that the sharp increases recorded months ago have already been absorbed by the domestic market; however, the outlook remains subject to the evolution of international conflicts. “If the international conflict persists over the coming weeks, fuel prices could reach new highs, with direct effects on transportation, production, and food costs in Costa Rica,” he said.
