Costa Rica Economic Forecast

Costa Rica Economic Outlook

February 12, 2019

Economic growth slowed to a five-year low in 2018, according to preliminary data released in January by the Central Bank, due to weak consumption growth and sluggish fixed investment. Although GDP data for the fourth quarter will only be released on 29 March, the Central Bank’s monthly economic activity index has already shown a sharp growth slowdown in Q4. This was likely the consequence of widespread protests against new fiscal reform measures, which notably include the replacement of the old general sales tax with a VAT and compelled thousands of Costa Ricans to take to the streets between early-September and mid-December. The mining and quarrying; agriculture, forestry and fishing; and education and healthcare sectors were all particularly downbeat in Q4. Against this backdrop, the unemployment rate rose to a multi-year high in the quarter. More positively, the fiscal deficit narrowed slightly in 2018 compared to 2017.

Costa Rica Economic Growth

Stronger fixed investment growth on the back of a more certain and sustainable fiscal outlook, coupled with solid export growth linked to a weaker colón and robust U.S. demand, should lead to an uptick in economic growth this year. That being said, fiscal austerity and tighter monetary conditions, compounded by ongoing instability in neighboring Nicaragua, could limit growth prospects. FocusEconomics Consensus Forecast panelists expect GDP to grow 2.8% in 2019, which is down 0.1 percentage points from last month’s forecast, and 3.0% in 2020.

Costa Rica Economy Data

Population (million)
GDP per capita (USD)10,44910,33810,85010,66710,657
GDP (USD bn)45.446.550.352.452.9
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-
Unemployment Rate8.
Fiscal Balance (% of GDP)-5.4-5.6-5.7-5.3-6.2
Public Debt (% of GDP)35.838.440.945.049.2
Money (annual variation in %)11.911.613.97.39.5
Inflation Rate (CPI, annual variation in %, eop)3.75.1-
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)1.44.9-
Benchmark Interest Rate (%)6.507.205.954.455.95
Exchange Rate (vs USD)500.7540.8537.3553.2571.4
Exchange Rate (vs USD, aop)501.0537.2534.6544.0567.9
Current Account (% of GDP)-5.4-5.3-3.8-2.8-3.2
Current Account Balance (USD bn)-2.4-2.5-1.9-1.5-1.7
Trade Balance (USD billion)-6.4-6.4-5.5-5.4-5.3
Exports (USD billion)
Imports (USD billion)15.115.614.715.315.9
Exports (annual variation in %)-
Imports (annual variation in %)1.23.1-
International Reserves (USD)
External Debt (% of GDP)42.946.546.948.750.8

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Costa Rica Facts

Exchange Rate610.3-0.57 %Feb 14

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