Costa Rica Economic Forecast

Costa Rica Economic Outlook

December 7, 2017

Recent data shows that the economy is slowing somewhat as it approaches the end of an otherwise solid year of growth. Annual economic activity, as measured monthly by the Central Bank, moderated in September due to weaker performances in the construction, and mining and quarrying sectors, but was supported by a recovering agricultural sector. On 9 November, the government presented a revised congressional proposal designed to increase urgently-needed fiscal sustainability from next year, after a previous reform attempt was unsuccessful. The proposal includes caps on public salaries, a move towards a rule-based fiscal framework and a replacement of the current sales tax with a value-added tax. Meanwhile, according to the Costa Rican National Emergency Commission, damages caused by Tropical Storm Nate—which affected Costa Rica on 5 October—approximated to USD 365 million.

Costa Rica Economic Growth

A strong external sector should continue supporting the economy next year, with key export markets such as the U.S. expected to perform strongly. However, the government’s fiscal difficulties, including high debt levels and persistent fiscal deficits; the impact of Tropical Storm Nate; and creeping inflationary pressures weigh on the outlook. The FocusEconomics Consensus Forecast panel sees GDP expanding 3.7% in 2018, which is down 0.1 percentage points from last month’s projection. In 2019, the panel foresees a 3.8% expansion.

Costa Rica Economy Data

20122013201420152016
Population (million)4.74.74.84.94.9
GDP per capita (USD)9,73110,44910,33810,85010,737
GDP (USD bn)45.349.249.552.652.7
Economic Growth (GDP, annual variation in %)4.72.13.04.74.3
Consumption (annual variation in %)4.92.93.44.34.1
Investment (annual variation in %)10.4-1.12.98.9-1.5
Unemployment Rate7.88.39.79.69.5
Fiscal Balance (% of GDP)-4.4-5.4-5.7-5.9-  
Public Debt (% of GDP)34.235.838.340.8-  
Money (annual variation in %)18.211.911.613.97.3
Inflation Rate (CPI, annual variation in %, eop)4.63.75.1-0.80.8
Inflation Rate (CPI, annual variation in %)4.55.24.50.80.0
Inflation (PPI, annual variation in %)3.81.44.9-0.40.3
Benchmark Interest Rate (%)9.206.507.205.954.45
Exchange Rate (vs USD)512.6500.7540.8537.3553.2
Exchange Rate (vs USD, aop)503.1501.0537.2534.6544.0
Current Account (% of GDP)-5.3-4.9-5.0-4.5-3.6
Current Account Balance (USD bn)-2.4-2.4-2.5-2.4-1.9
Trade Balance (USD billion)-6.2-6.4-6.4-5.9-5.4
Exports (USD billion)8.78.69.19.29.9
Imports (USD billion)14.915.115.615.115.3
Exports (annual variation in %)7.7-1.15.60.77.8
Imports (annual variation in %)7.91.23.1-2.81.3
International Reserves (USD)6.97.37.27.87.6
External Debt (% of GDP)34.039.844.045.448.9

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Costa Rica Facts

ValueChangeDate
Exchange Rate568.1-0.57 %Dec 06

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