Costa Rica Economic Outlook
October 9, 2018The economy found its feet in the second quarter of 2018, as year-on-year GDP growth accelerated to the fastest pace in a year. The upturn was driven by increased fixed investment, which was partly due to a low base effect. Government consumption increased at a steady pace, while private consumption expanded at a slightly slower rate on the back of higher unemployment. The external sector detracted from overall growth. This broadly positive momentum carried over into the start of Q3, as economic activity in July grew at the fastest pace since January 2017. However, the economy will have been hampered by union strikes towards the end of the quarter as, since early September, workers have rallied against a fiscal reform bill currently making its way through the Legislative Assembly. The bill will introduce a VAT system, raise income taxes on higher-income earners and constrain government spending from next year, all to the benefit of the public purse but fiercely opposed by those protesting on the streets.
Costa Rica Economic GrowthA more stable political environment coupled with strong growth in the United States—boosting demand for exports—should support economic growth this year and next. However, austerity measures to help reduce the fiscal deficit will weigh on prospects, as could instability in neighboring Nicaragua. FocusEconomics Consensus Forecast panelists expect GDP to grow 3.1% in 2018 and 3.2% in 2019, which is down 0.1 percentage points from last month’s projection.
Costa Rica Economy Data
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Costa Rica Facts
|Exchange Rate||594.0||-0.57 %||Oct 12|
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Costa Rica Economic News
October 5, 2018
Consumer prices rose 0.22% in September compared to the previous month, marking a contrast with the 0.07% fall logged in August.
September 28, 2018
The economy grew at the fastest rate in a year in the second quarter of 2018, according to the Central Bank of Costa Rica.
September 11, 2018
In July, annual growth in economic activity accelerated to 3.7% from a substantially-revised 3.6% in June (previously reported: +4.2% year-on-year).
August 10, 2018
In June, annual growth in economic activity accelerated to 4.2% from a revised 4.0% in May (previously reported: +4.4% year-on-year), according to the monthly index of economic activity (IMAE, Indice Mensual de Actividad Económica) published by the Central Bank of Costa Rica (BCCR).
August 8, 2018
Consumer prices rose 0.28% in July compared to the previous month, up from June’s 0.18% increase.