Costa Rica Economic Outlook
November 10, 2020The 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 GrowthThe 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.
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|Exchange Rate||571.0||-0.57 %||Jan 01|
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Costa Rica Economic News
January 12, 2021
Consumer prices increased over the previous month in December, clocking in a 0.53% rise, notably up from November’s flat reading and marking a 17-month high.
January 12, 2021
Economic activity continued to shrink in November, although at 6.5% year-on-year it is the mildest contraction since March, following October’s 6.6% drop.
December 30, 2020
The economy shrank again in the third quarter, although at a notably softer pace than in the second (Q3: -7.2% year-on-year; Q2: -8.9% yoy).
December 17, 2020
At its monetary policy meeting on 16 December, the Central Bank of Costa Rica decided to maintain the monetary policy rate at its record low of 0.75%, having cut it from 1.25% on 17 June.
December 15, 2020
Economic activity continued to decrease in October, although at 6.6% year-on-year it is the softest contraction since March, following September’s 6.8% contraction (previously reported: -7.1% year-on-year).