Family Spending Highest in 10 Years
by Rod Hughes
Everyone gripes about inflation in Costa Rica, but families are currently spending more proportionate income than they have in 10 years, thanks to a slowed inflation rate (partially fueled by a real estate boom that shows no sign of flagging.) The daily La Nacion reports that the retail commercial upsurge began two years ago.
The sale of imported goods, reports the paper, is currently at $1.7 billion, larger than the project foreing investment for the year. Purchases of such items as food, clothing and vehicles has shot up 29% over the same period last year. The highest increases of import sales are medicines and beauty aids, autos, machinery and home appliances, even down to microwave ovens and hair dryers.
According to Banco Central, the country’s financial regulator, the commercial sector has increased by 5.5%, a hike only exceeded by 1998 when it jumped 6.29%. The bank expects by the end of the year consumer spending will have increased 6%.
Specifically, the factors the bank sees as contributing to this happy situation, besides slowed inflation, are more jobs and higher salaries, easier loans and low interest and a robust consumer confidence that belies all the complaints about high prices. By July of this year 10% more (114,000) workers were registered with Social Security, indicating an increase in formal working situations. This is the highest in four years.
The drop in interest rates by nearly half of what they were last year has also heated the economy by making more income available to families. Optimistic retailers of all kinds are looking forward to the holiday season when the mandatory Christmas bonus fills wallets.