Costa Rica Economic Forecast

Costa Rica Economic Outlook

September 10, 2019

The economy appeared to have a tough second quarter, with activity slowing considerably in the period owing to falling agricultural activity amid the recent long spell of dry weather. GDP figures, however, will not be released until 30 September. Turning to the third quarter, the economy should strengthen somewhat, as suggested by July’s rebound in merchandise exports, while the Central Bank’s recent rate cuts should support private consumption and fixed investment. The introduction of the new VAT in July will limit gains from this, however, and almost certainly contributed to a fall in consumer confidence in August, although should help buffer government coffers after the fiscal deficit widened slightly in H1. Meanwhile, in politics, the government presented its 2020 fiscal budget to Congress on 30 August, which would increase current expenditure at the weakest pace in a decade.

Costa Rica Economic Growth

Overall, the economy should slow this year, as a struggling agriculture sector, instability in Nicaragua and increased global trade tensions sap away momentum. More positively, though, there has been an accumulated reduction of 125 basis points in the Central Bank’s policy rate so far this year, which should support fixed investment. FocusEconomics Consensus Forecast panelists expect GDP to grow 2.2% in 2019, which is down 0.4 percentage points from last month’s forecast, and 2.6% in 2020.

Costa Rica Economy Data

Population (million)
GDP per capita (USD)10,48510,57411,29211,65911,707
GDP (USD bn)49.650.754.857.258.1
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-
Unemployment Rate8.
Fiscal Balance (% of GDP)-5.4-5.6-5.7-5.3-6.1
Public Debt (% of GDP)35.938.541.045.148.7
Money (annual variation in %)14.311.76.12.1-1.0
Inflation Rate (CPI, annual variation in %, eop)3.75.1-
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)-  -  -  -  -  
Benchmark Interest Rate (%)6.507.205.954.455.95
Exchange Rate (vs USD)500.7540.8537.3553.2571.4
Exchange Rate (vs USD, aop)501.0537.2534.6544.0567.9
Current Account (% of GDP)-4.9-4.8-3.5-2.2-3.0
Current Account Balance (USD bn)-2.4-2.5-1.9-1.3-1.7
Trade Balance (USD billion)-6.4-6.4-5.5-5.3-5.3
Exports (USD billion)
Imports (USD billion)15.115.614.715.215.9
Exports (annual variation in %)-
Imports (annual variation in %)1.23.1-
International Reserves (USD)
External Debt (% of GDP)39.342.643.144.746.8

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Costa Rica Facts

Exchange Rate576.5-0.57 %Sep 04

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Costa Rica Economic News

  • Costa Rica: The economy accelerates in July

    September 11, 2019

    Annual economic growth in cyclically-adjusted terms accelerated to 1.5% in July from June’s revised 1.3% (previously reported: +1.5% year-on-year), nevertheless, economic activity remained subdued by historical standards. Although economic growth ticked up in July, partly on strong activity growth in the ICT sector, it was still hampered by a continued decline in activity in the agriculture sector, which is struggling following a prolonged spell of dry weather, partly due to the El Niño effect.

    Read more

  • Costa Rica: Government proposes tightening the belt in 2020

    September 9, 2019

    On 30 August, the fiscally-strained government of Costa Rica presented to Congress its 2020 budget proposal, which outlines cutting spending by 4.3% compared to this year.

    Read more

  • Costa Rica: Inflation holds steady in August, while the Central Bank leaves rates unchanged on 21 August

    September 6, 2019

    Consumer prices fell 0.1% in August compared to the previous month, contrasting the 0.7% jump in July, which was a three-and-a-half year high and due to the introduction of an expanded VAT in the month.

    Read more

  • Costa Rica: The economy remains sluggish in June

    August 9, 2019

    Annual economic growth in cyclically-adjusted terms inched up to 1.5% in June from May’s revised 1.4% (previously reported: +1.3% year-on-year), which represented the weakest reading since December 2009. Growth remained historically subdued in June due to a continued decline in activity in the agriculture sector, which is struggling following a prolonged spell of dry weather, partly due to the El Niño effect.

    Read more

  • Costa Rica: The economy grows at a near decade-low rate in May

    July 12, 2019

    Annual economic growth in cyclically-adjusted terms slowed to 1.3% in May, down from April’s revised 1.4% growth (previously reported: +1.6% year-on-year).

    Read more

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