Central Bank of Costa Rica presents research from its 2025 Economic Research Days on inflation, exchange-rate pass-through and digital payments

The Central Bank of Costa Rica reported on its 2025 Economic Research Days, a virtual event held on 10–11 November, where it presented seven recent studies from its Economic Research Department, most of which are already published in the Bank’s Economic Research Repository. The studies covered inflation forecasting and dynamics, digital payments, growth risks and other policy-relevant topics. Research on inflation forecasting modelled all 289 items of the consumer price index individually and incorporated exogenous drivers such as the exchange rate, commodity prices and agricultural prices, delivering significantly more accurate forecasts than conventional approaches. Work on exchange-rate pass-through found inflation responds little when nominal exchange-rate movements are driven by external factors such as shifts in foreign-currency demand, but reacts six times more when driven by domestic factors such as interest-rate adjustments. Other findings included that mass adoption of digital payments systems such as PIX, SINPE Móvil and CoDi depends on quickly narrowing adoption gaps between high- and low-income users; a first “growth at risk” estimate for Costa Rica incorporating domestic financial conditions and external variables such as US growth and terms of trade; evidence from 2019–2022 that extreme rainfall and drought temporarily shift consumer spending patterns across categories; and manufacturing-sector estimates suggesting an optimal reallocation of labour and capital could raise productivity by 64% to 88% based on 2005–2022 microdata. Recordings of the presentations were made available, and the paper on manufacturing resource allocation was marked as forthcoming.