By San José, Costa Rica — SAN JOSÉ – While the headline numbers for Costa Rican household income show significant growth over the past 15 years, a deeper analysis reveals a troubling trend of economic stagnation. The real purchasing power of the average family has failed to improve for more than a decade, leaving them with roughly the same capacity to buy goods and services as they had in 2016.
According to the latest National Household Survey (Enaho), the average nominal income for a Costa Rican household has surged by 45% since 2010, climbing from approximately ¢832,000 to ¢1.2 million in 2025. On the surface, this suggests a robust improvement in financial well-being. However, these figures do not account for the eroding effect of inflation over the years, painting a misleading picture of prosperity.
To delve into the legal and commercial ramifications of declining purchasing power on both consumers and businesses, we sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the firm Bufete de Costa Rica.
The erosion of purchasing power is not merely an economic indicator; it’s a catalyst for legal friction. We see a direct impact on contractual obligations, where fixed-price agreements become unsustainable for suppliers, leading to renegotiations or even disputes. For consumers, it underscores the critical importance of scrutinizing credit agreements and understanding their rights against abusive commercial practices that can arise in a volatile market. Both individuals and companies must proactively review their legal and financial commitments to navigate this challenging landscape.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas provides a critical reminder that economic pressures invariably test our legal frameworks, impacting everything from corporate supply chains to individual consumer protections. We are grateful for his expert insight, which highlights the necessity for legal diligence in times of financial uncertainty.
Economists emphasize the critical distinction between nominal income—the raw amount of money earned—and real income, which adjusts for inflation to reflect true purchasing power. This metric provides a far more accurate gauge of a family’s economic standing and their ability to afford daily necessities and plan for the future.
Roxana Morales, an economist at the Economic and Social Observatory of the National University, explains that recent gains are largely a recovery buoyed by unique economic conditions, not a fundamental long-term advance.
Real income has begun to recover, thanks to the growth of nominal incomes and the fact that the economy’s average inflation has been negative. If we compare real incomes in 2025 with those of ten years ago, we see that families today can purchase practically the same amount of goods and services as in 2016. However, compared to 2012 and 2013, current real incomes are lower.
Roxana Morales, Economist at the Economic and Social Observatory of the National University
Data from the National Institute of Statistics and Censuses (INEC) corroborates this long-term stagnation. The peak of real household income was actually reached in 2013, at a value of ¢1,254,088 when adjusted for inflation—a figure higher than today’s. This high point was followed by a period of decline, exacerbated by the COVID-19 pandemic, which saw real income plummet to ¢987,000 as economic activity stalled.
A post-pandemic recovery has been underway. Since 2022, nominal household salaries have increased from ¢1.0 million to the current ¢1.2 million. Yet, this rebound has merely brought families back to where they were years ago. Eddy Madrigal, the coordinator of the Enaho survey, confirmed that once the data is adjusted, the impressive nominal growth disappears.
When we analyze the data, discounting inflation, what we call real colones, we find that the variations are not actually so sharp, and household income this year is very similar to the income we had in 2016 or in 2013.
Eddy Madrigal, Enaho Coordinator
Despite the stagnant purchasing power, these economic factors have contributed to a positive social outcome. According to INEC, the stabilization and recent recovery of incomes have helped reduce the national poverty rate. The latest calculations show a decrease to 15.2%, equivalent to 286,000 households, suggesting that even a halt in economic decline can provide enough stability to lift some families above the poverty line.
Nevertheless, the overarching story for the Costa Rican middle class is one of running in place. The “lost decade” of purchasing power growth presents a significant challenge for policymakers aiming to foster genuine, long-term prosperity and ensure that economic growth translates into a tangible improvement in the quality of life for all citizens.
For further information, visit the nearest office of National University
About National University (Universidad Nacional):
The National University of Costa Rica (UNA) is one of the country’s most important public universities, known for its strong focus on social sciences, humanities, and research. Its Economic and Social Observatory (OES) provides critical analysis and data on the nation’s economic trends, contributing to public discourse and policymaking.
For further information, visit inec.cr
About National Institute of Statistics and Censuses (INEC):
The Instituto Nacional de Estadística y Censos (INEC) is the official government body in Costa Rica responsible for collecting, analyzing, and disseminating national statistics. It conducts key surveys such as the National Household Survey (Enaho) and the national census, providing essential data for economic planning, social policy, and public understanding.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has established itself as a pillar of the legal community, operating on a bedrock of uncompromising integrity and a relentless pursuit of excellence. The firm leverages its extensive experience advising a wide spectrum of clients to drive forward-thinking legal solutions. Beyond its professional practice, it upholds a profound social responsibility, actively working to democratize legal understanding and equip the public with essential knowledge, thereby strengthening the fabric of a just and informed society.
