Costa Rica Economic Outlook
October 13, 2020The economy contracted sharply in Q2 as pandemic-related restrictions took their toll on activity. Moreover, available data for Q3 suggests that economic conditions remained lackluster: Economic activity dropped at a record pace in July and August, while and both exports and imports shrank in August, and the unemployment rate remained high, although it ticked down in August. However, restrictions were further eased on 9 September, boding well for activity heading into Q4. In other news, a fourth extraordinary budget for 2020 was presented on 5 October, in a bid to further cut spending. Meanwhile, the 2021 draft budget submitted in early September includes an increase in the fiscal deficit to 9.9% of GDP, from an estimated 9.3% this year. Additionally, President Quesada stated his intention to withdraw the proposed austerity plan drawn up to secure a USD 1.75 billion IMF loan, amid street protests and opposition objections.
Costa Rica Economic GrowthEconomic activity will shrink notably this year as the pandemic weighs heavily on domestic and foreign demand and the unemployment rate rises. In 2021, the economy is set to rebound, although lingering uncertainty regarding the evolution of the virus poses a threat to the recovery, and could delay household spending decisions. FocusEconomics panelists see GDP contracting 4.9% in 2020, before growing 3.0% in 2021, which is up 0.1 percentage points from last month’s projection.
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Costa Rica Economic News
October 12, 2020
Economic activity dived 7.7% in year-on-year terms in August, matching July’s record contraction, according to the Central Bank of Costa Rica’s monthly activity index.
October 9, 2020
According to the Central Bank of Costa Rica’s monthly activity index, economic activity plummeted a record 7.7% in year-on-year terms in July, following June’s 7.5% drop.
October 8, 2020
Consumer prices increased 0.27% over the previous month in September, up from August’s flat reading.
October 6, 2020
The economy shrank 8.6% year-on-year in the second quarter, swinging from a soft 0.6% expansion in the first quarter.
September 17, 2020
At its monetary policy meeting on 16 September, the Central Bank of Costa Rica (BCCR) decided to maintain the monetary policy rate (MPR) at its record low of 0.75%, having lowered it from 1.25% on 17 June.