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Cablegate: Consumer Confidence in Costa Rica Reaches New Low

This record is a partial extract of the original cable. The full text of the original cable is not available.

071943Z Dec 05

UNCLAS SAN JOSE 002794

SIPDIS

SENSITIVE

WHA/CEN
EB FOR WCRAFT, BLAMPRON
E FOR DEDWARDS
WHA/EPSC FOR KURS, LGUMBINER
STATE PASS TO USTR FOR AMALITO

E.O. 12958: N/A
TAGS: EINV KIDE PGOV CS
SUBJECT: CONSUMER CONFIDENCE IN COSTA RICA REACHES NEW LOW


REF: SAN JOSE 02731

1. (U) Summary: According to the results of a November
survey conducted by the University of Costa Rica's (UCR)
School of Statistics, consumer confidence in Costa Rica has
reached a new low. With a four point margin of error the
study reveals that 75% of consumers think that the
government is doing dismally in combating inflation,
unemployment and poverty. End Summary

2. (U) The UCR School of Statistics conducts a consumer
confidence survey twice a year, March and September.
According to this poll
http://www.odd.ucr.ac.cr/documentos/informe_i cc_nov05.pdf
the number of respondents who believe they and their
families are better off than a year ago has reached a new
low. The following shows the trend over the last eight
surveys to this question:

Can you tell me if economically you and your family are
better or worse off than a year ago?

Don't Number of
Better Equal Worse Know Interviews

Sep-02 22.8 35.9 40.3 0.9 632
Mar-03 25.5 42.5 31.2 0.8 866
Sep-03 21.7 36.8 40.5 1.0 807
Mar-04 22.9 36.0 40.6 0.5 812
Sep-04 13.7 28.3 57.5 0.5 802
Mar-05 19.7 34.2 45.9 0.2 808
Aug-05 17.7 29.4 52.6 0.3 700
Nov-05 11.8 31.6 56.4 0.2 608

3. (U) According to another question in the survey, 65%
believed that interest rates would continue to rise; 75%
believe that the government has done little in the way of
programs to alleviate inflation, unemployment and poverty
and perceive that all have, in fact, worsened. Some 76% of
the respondents indicated that they would be unwilling to
replace their current vehicles and 58% said this is a bad
time to consider buying a home.

4. (U) More that half (66%) said they believed that the
country is experiencing a period of economic and political
crisis and 46% see that they are worse off this year
financially as prices have risen and they can see that they
have lost buying power due to the over 14 percent inflation
rate.

5. (SBU) Comment: The results of this poll of consumer
confidence parallel the pessimism reflected in a recent
survey of investor confidence (reported reftel and contained
in
http://www.bccr.fi.cr/ndie/Documentos/Informe %20Encuesta%20I
II-05.pdf). Both recorded the most pessimistic views since
President Pacheco took office in May 2002. The fact that
both consumers and investors have such a pessimistic view of
the current situation will affect the February 5
presidential and legislative elections.
LANGDALE

© Scoop Media

 
 
 
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