I just received an inquiry from someone who was thinking about moving here but changed his mind because of the high cost of living.

A key factor is the fact that the dollar’s strength has fallen here. First, the latter is not a permanent situation. Costa Rica has always artificially inflated and deflated its currency.

I have been told by knowledgeable sources that the true value of the colón (local currency) is 800 to the dollar. Can you imagine that!

This economy is very strange in this small country. For instance, in 1982 the country paid the price for consuming more than it produced, importing more than it exported, and borrowing abroad to make up the difference. A resultant recession caused the colón’s value to devaluate from 8.5 to the dollar to around 45 to the dollar. Thousands of locals saw their life savings go up in smoke.

The country continues to manipulate its currency which could lead to a crisis like the one above according to several editorials that I have read written by prominent economists. Almost 150,000 Costa Ricans have lost their jobs because of the most recent currency manipulation to an excess of dollars (sobreoferta) in the economy, so they say. Of course, as a result, expats have lost some of their purchasing power (poder adquisitivo), especially those with fixed incomes.

Despite the above many of my clients insist that it is still less expensive to live here than in the United States. So, what can you…