Costa Rica Economic Forecast

Costa Rica Economic Outlook

May 17, 2022

After growing robustly last year, growth seemed to slow in Q1 2022. Economic activity contracted in every month of Q1 2022 in seasonally-adjusted month-on-month terms due to the worst Covid-19 wave since the start of the pandemic, rising inflation and increasingly tighter monetary policy. Turning to Q2, growth is likely slowing further: Consumer spending is probably being hampered by the ongoing inflationary wave, while rising production costs may be hampering output as well. That said, a recovering tourist sector and a region-leading vaccination scheme will offer some support to activity. In politics, former Finance Minister Rodrigo Chaves was sworn into office on 8 May, marking the start of a challenging term. While Chaves initially promised to boost growth, lower the cost of living and push for political reforms, the current economic landscape may render these goals unfeasible.

Costa Rica Economic Growth

Growth should moderate in 2022 compared to 2021, owing to a fading base effect, economic slowdown among major trading partners, and higher inflation and interest rates. Further downside risks to the outlook stem from potential new Covid-19 variants, a fragmented parliament, and sharp monetary tightening at home and in the U.S. FocusEconomics panelists see GDP expanding 3.5% in 2022, which is down 0.1 percentage points from last month’s forecast, and 3.1% in 2023.

Costa Rica Economy Data

2015 2016 2017 2018 2019
Population (million)4.94.95.05.05.1
GDP per capita (USD)11,29211,65911,76912,05412,171
GDP (USD bn)54.857.258.460.561.8
Economic Growth (GDP, annual variation in %)3.64.23.92.72.1
Consumption (annual variation in %)4.23.63.51.72.2
Investment (annual variation in %)3.04.8-2.53.0-6.4
Unemployment Rate9.69.59.312.012.4
Fiscal Balance (% of GDP)-5.7-5.2-6.1-5.8-7.0
Public Debt (% of GDP)41.045.148.453.258.5
Money (annual variation in %)6.12.1-1.0-0.46.2
Inflation Rate (CPI, annual variation in %, eop)-0.80.82.62.01.5
Inflation Rate (CPI, annual variation in %)0.80.01.62.22.1
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)5.954.455.956.005.75
Exchange Rate (vs USD)537.3553.2571.4604.5571.0
Exchange Rate (vs USD, aop)534.6544.0567.9577.2586.9
Current Account (% of GDP)-3.5-2.2-3.4-3.3-2.5
Current Account Balance (USD bn)-1.9-1.3-2.0-2.0-1.5
Trade Balance (USD billion)-5.5-5.3-5.3-5.3-4.7
Exports (USD billion)9.29.910.611.311.5
Imports (USD billion)14.715.215.916.616.1
Exports (annual variation in %)0.77.96.96.11.8
Imports (annual variation in %)-5.23.34.44.2-2.8
International Reserves (USD)7.87.67.17.58.9
External Debt (% of GDP)43.144.746.447.949.7

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Costa Rica Facts

Value Change Date
Exchange Rate571.0-0.57 %Jan 01

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