Costa Rica Economic Outlook
July 14, 2020The economy will have contracted sharply in the Q2 due to lockdown restrictions introduced in March, after almost grinding to a halt in Q1. Economic activity plummeted in April and May according to Central Bank data. Moreover, merchandise exports fell in April–May by around 15% in annual terms, as global demand dried up. Meanwhile, although government spending was broadly stable in January–April compared to the same period last year, this was due to an increase in debt payments masking a drop in capital spending; revenue also slipped, resulting in a slightly higher fiscal deficit. More positively, the government has been relaxing coronavirus restrictions since 1 May, although the process is gradual and all activity will require social distancing. Moreover, the World Bank loaned USD 300 million to the government on 26 June.
Costa Rica Economic GrowthThe economy will shrink this year as coronavirus containment measures hit activity. However, monetary policy stimulus should soften the blow. Moreover, the country’s accession to the OECD should provide a longer-term boost via its impact on investor sentiment. FocusEconomics panelists project GDP to contract 3.7% in 2020, which is down 0.3 percentage points from last month’s forecast, before growing 3.0% in 2021.
Costa Rica Economy Data
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|Exchange Rate||571.0||-0.57 %||Jan 01|
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Costa Rica Economic News
August 7, 2020
Consumer prices rose 0.26% from the previous month in July, swinging from June's 0.02% drop.
July 22, 2020
At its monetary policy meeting on 22 July, the Central Bank of Costa Rica (BCCR) maintained the monetary policy rate (MPR) of 0.75%, to where it was lowered from 1.25% on 17 June.
July 10, 2020
Economic activity decreased 7.5% in year-on-year terms in May, down from the 6.7% decrease recorded in April, according to the Central Bank of Costa Rica’s monthly activity index.
July 7, 2020
Consumer prices dropped 0.02% in June over the last month, a more moderate fall than May's 0.15% drop.
June 30, 2020
GDP expanded 0.6% year-on-year in the first quarter of 2020 (Q4 2019: +3.2 yoy), marking the softest growth rate since Q2 2019 and largely reflecting Covid-19 containment measures introduced in March. The downturn was broad-based.