According to the National Institute of Statistics and Census (INEC), the number of people living in poverty has increased to a level not seen for three decades due to the economic crisis triggered by the COVID-19 pandemic.
The number of Costa Rican households living in poverty grew from 335,895 in July 2019 to 420,000 in July 2020, an increase of 5.2%. This is the highest level of poverty since 1992 and represents 26.2% of all households. The INEC also registered an increase in the level of extreme poverty which now stands at 7%, a growth of 1.2% since 2019.
According to the Costa Rican statistics office, a poor family has an income of $80 per person a month or less. This income represents the cost of a basic food basket which contains essential food products and certain other basic non-food products.
The INEC states that the poverty rate increased in urban areas in particularly reaching 26.4% while in rural areas this was 25.5% due to the simple fact that people here are farmers so, therefore, have easier access to food.
The pandemic has also caused a dramatic increase in unemployment rates which stood at 12.3% in March 2020 but has now risen to 24%.
To address this challenge, the Costa Rican government decided to launch “Plan Proteger” in April 2020 which aimed to channel money to those most affected by the COVID-19 outbreak and led to a total of 800,000 people receiving financial support from the government.
In the face of a serious financial crisis impacting the whole of Central America, the Interamerican Development Bank (IDB) also approved additional support for the region with Costa Rica receiving US$265 million to secure the minimum level of income and maintain jobs for the most vulnerable citizens. The money aims to help people who have lost their jobs, both in the formal and informal sectors. Thanks to this support, the Costa Rican government will be able to develop programs with the goal of boosting the labor market. It is planned to pass the benefits to employers to enable them to retain employees, especially those companies in the tourist industry. According to IDB officials, about 365,000 people will be able to benefit from this additional help.
