bandon843 wrote:
Not just food, but all daily necessities. CR is way too darn expensive relative to ALL regional countries, yes including all of Latin America. There is no justification for that other than the overvaluation of the CR colon.
I'm sorry bud, but one doesn't mean the other. You assume that the price of commodities is fixed relative to the dollar, and therefore costs the same to tourists, thus highlighting an artificially inflated exchange rate. But this logic does not hold. The commodity can rise or fall en todo, regardless of the currency you are measuring. Gold is an extreme example, and though there are miles separating gold versus a chicken dinner, that same separation of commodity value to currency exists.
Take a look at Orange's hamburger chart. Though not actually meant to measure individual currencies, it states that as of June 2015 the 'real' value of the colón is 448 to the dollar, and not in the 600's where you suggest. Now, agreed it is hardly a solid measure, but it's the first real piece of economic statistics posted in this thread.
Now, what is relevant is the current deflation rate versus the hardcoded rise in wages. I don't really understand the whole cycle of economic whatevers, but to me, this situation will either devalue the currency or ignite inflation. In the past 3 deflation cycles in the US, statistics show a reduction in base wages. There was an article on this exact topic from a British study of UK rates for 40 years, and I am looking for it to post.