Costa Rica Economic Forecast

Costa Rica Economic Outlook

May 19, 2020

The economy suffered in Q1 due to a deterioration in the construction sector, and a severe downturn in the accommodation and food services sector, particularly in March when the government declared a national emergency due to coronavirus. To help mitigate the financial strain on businesses and consumers, the government has announced fiscal policy changes, including a moratorium on various taxes and direct payments to vulnerable households. To help pay for these, the government requested financial support from the IMF, which was approved on 29 April to the tune of USD 504 million; at the end of March, the World Bank lent the government USD 157 million. On 8 May, Fitch Ratings downgraded Costa Rica's credit rating to B from B+, and assigned a negative rating outlook. In recent weeks, the government has been gradually reducing some restrictions on activity to slowly re-boot the economy.

Costa Rica Economic Growth

The economy will contract this year as coronavirus containment measures drag on activity. However, fiscal and monetary policy stimulus should soften the blow. Moreover, the country's accession to the OECD should provide a longer-term boost as investors view Costa Rica more favorably. FocusEconomics panelists project GDP to contract 3.0% in 2020, which is down 1.3 percentage points from last month's forecast, before growing 3.4% in 2021.

Costa Rica Economy Data

2014 2015 2016 2017 2018
Population (million)4.84.94.95.05.0
GDP per capita (USD)10,57411,29211,65911,76912,054
GDP (USD bn)50.754.857.258.460.5
Economic Growth (GDP, annual variation in %)3.53.64.23.92.7
Consumption (annual variation in %)3.94.23.63.51.7
Investment (annual variation in %)3.33.04.8-2.53.0
Unemployment Rate9.79.69.59.312.0
Fiscal Balance (% of GDP)-5.6-5.7-5.2-6.1-5.9
Public Debt (% of GDP)38.541.045.148.453.2
Money (annual variation in %)11.76.12.1-1.0-0.4
Inflation Rate (CPI, annual variation in %, eop)5.1-0.80.82.62.0
Inflation Rate (CPI, annual variation in %)4.50.80.01.62.2
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)7.205.954.455.956.00
Exchange Rate (vs USD)540.8537.3553.2571.4604.5
Exchange Rate (vs USD, aop)537.2534.6544.0567.9577.2
Current Account (% of GDP)-4.8-3.5-2.2-3.4-3.3
Current Account Balance (USD bn)-2.5-1.9-1.3-2.0-2.0
Trade Balance (USD billion)-6.4-5.5-5.3-5.3-5.3
Exports (USD billion)9.19.29.910.611.3
Imports (USD billion)15.614.715.215.916.6
Exports (annual variation in %)5.60.77.96.96.1
Imports (annual variation in %)3.1-5.23.34.44.2
International Reserves (USD)7.27.87.67.17.5
External Debt (% of GDP)42.643.144.746.548.1

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Costa Rica Facts

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

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