Costa Rica Economic Forecast

Costa Rica Economic Outlook

April 12, 2022

GDP grew at a slower pace in Q4 2021 amid a tangible slowdown in export growth and surging imports. That said, improving labor market conditions lifted private spending, while investment was likely boosted by solid business sentiment. Turning to 2022, seasonally-adjusted economic activity fell through February in month-on-month terms, amid surging Covid-19 cases and rising price pressures. In politics, April saw former Finance Minister Rodrigo Chaves win the second-round presidential runoff. Chaves—who will assume office in May—has proposed largely business-friendly policies, focused on lowering public debt, avoiding tax hikes, removing red tape and staying in line with IMF recommendations. That said, the president-elect has also shown an anti-establishment streak and spoken of using referendums to overcome the current parliamentary deadlock, which could stoke conflict with congress.

Costa Rica Economic Growth

Growth should moderate in 2022 compared to 2021, owing to a fading base effect, slower U.S. growth, 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 in the U.S. causing capital outflows. FocusEconomics panelists see GDP expanding 3.6% in 2022, which is unchanged from last month’s forecast, and 3.0% 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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