Costa Rica Economic Forecast

Costa Rica Economic Outlook

November 10, 2020

The economic panorama likely remained downbeat in Q3 due to the ongoing health crisis. Economic activity contracted at a sharper pace in July–August, while the unemployment rate remained high in the same period. More positively, however, exports recovered and imports fell at a softer pace in Q3. Turning to Q4, further restrictions have been eased, with air borders reopening to all countries on 1 November—without the need for a 14-day quarantine upon arrival nor proof of a negative coronavirus test —aiming to boost tourism and employment in the sector. However, this could lead to an increase in Covid-19 cases, which continued to rise in the country through September and October. In other news, in late October, the government modified the 2021 draft budget to include a 7.5% reduction in primary spending compared to 2020, in an attempt to control public expenditure.

Costa Rica Economic Growth

The economy is expected to slowly recover in 2021, after this year’s pandemic-induced contraction. However, the country faces many downside risks, including weakened government finances to face maturing debt, social unrest due to the proposed measures to try to secure a USD 1.75 billion IMF loan, and uncertainty over the course of the pandemic. FocusEconomics panelists see GDP expanding 3.3% in 2021, which is up 0.3 percentage points from last month’s forecast, and 3.5% in 2022.

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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