The marked upward trend of inflation during the first five months this year -13.26 percent higher than the figure for the same period last year will slow down in the coming months, according to economists, the Government, and the Central Bank of Costa Rica.

According to the sources, the increase in prices is due basically to adjustments in regulated goods and services -water, electricity, telephone, fuel, and a few others-, not to excess demand by consumers or to the monetary policy of the Central Bank.

The fact that the strong mark up in the regulated items will not be repeated in the second half of the year 2001 makes economists believe that the upward trend of inflation will be stemmed in the coming months.

This does not mean that prices will drop, rather that the increase rhythm will be slower, they added. On the other hand, analysts think that the top goal for inflation that the Government set for the year, 10 percent, will be easily surpassed.

On the other hand, Central Bank president Eduardo Lizano discarded fears in the monetary sector. He asserted that, for the time being, neither the rate of devaluation nor interest rates will increase.

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