Costa Rica News – You always here me talking about the increase in the cost of living in Costa Rica and that it is really not that cheap to live here anymore. As I walked into the grocery store this morning to purchase items to make fajitas the cost of normal goods really came into full focus as I paid for the bag of cheese for a little over $5.
For all of you that took economics in college or studied economics at some point in your life you will know what the consumer price index is. For all of you who do not know what it is this is the definition:
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
In essence it is a measure of inflation. (See Video Here) “Price Inflation” is the percentage increase in the price of the basket of products over a specific period of time.
I wondered what this figure was for Costa Rica and what its value had been over the past 10 years. Salaries are supposed to be increased each year by at least the amount of increase of the cost of living in order to keep up the rate of inflation. Let’s take a look at the CPI over the past ten years from January 2003 to December 2012.
In January 2003 this number was at 66.79 in December 2012 that number had increased to 154.99. This is an increase of 88.2 points in the CPI index. In percentage points this is an increase of 132%. This averaged out over the last ten years is equal to a 13.2% increase per year. (Click Here to Check Data)
This means that the actually inflation in Costa Rica was at about 13% per year for the past 10 years. I know that salaries have not increased 132% over the past 10 years, they are about 35% to 40% more than they were back then. Many people will say that the minimum wage requirements have increased over the years in Costa Rica. This is great if companies were actually required to follow the minimum wage laws. Most are not.
Although the cost of living in Costa Rica remains at a level that is not huge rent, food, gasoline, and most life essentials are at the level of the USA. Talk to people that live here and ask what their monthly expenses total. You will find that if you want to retire in Costa Rica or raise a family in Costa Rica it is getting more and more expensive.