Costa Rica's Rate Slash

CENTRAL AMERICA - Report 24 Jun 2013 by Francisco de Paula Gutierrez
Executive SummaryAfter discovering that a data error had accidentally inflated the Monthly Index of Economic Activity, Costa Rica's Central Bank quickly cut its policy rate by a full 100 basis points, to 4%. Everyone could already see the economy slowing: first in non free trade zone activities, and recently in the free trade zone, too. Overall trade was also affected by the data error; in reality, the value of merchandise exports was down 2.2% as of May.Slowing domestic lending growth (up 9.6% y/y in April) and sluggish core inflation growth (at 2.65% y/y in May, far below target range) we...

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