Costa Rica Economic Outlook
May 17, 2022After 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 GrowthGrowth 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
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|Exchange Rate||571.0||-0.57 %||Jan 01|
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Costa Rica Economic News
April 27, 2022
At its 27 April meeting, the Central Bank of Costa Rica (BCCR) raised the monetary policy rate by 150 basis points to 4.00%, marking the fourth consecutive hike since December 2021. The decision came amid the highest inflation figure since November 2014 in March and thus went further above the upper bound of the Bank’s 2.0–4.0% target band.
April 7, 2022
Consumer prices increased 0.88% in March over the previous month, following the 1.09% rise seen in February.
March 31, 2022
GDP growth moderated to 9.2% year-on-year in the fourth quarter, from 12.6% in the third quarter.
March 14, 2022
At its 14 March meeting, the Central Bank of Costa Rica (BCCR) raised the monetary policy rate by 75 basis points to 2.50%, marking the third consecutive hike. The decision came amid the highest inflation figure since December 2014, which reached 4.9% in February and thus went over the upper bound of the Bank’s 2.0–4.0% target band.
March 14, 2022
Economic activity continued to lose steam in January, after growing 9.0% in annual terms (December: +9.5% yoy) and marking the lowest outturn in 10 months.