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Costa Rica Economic Forecast

Costa Rica Economic Outlook

GDP growth ticked up in year-on-year terms in Q3 thanks to an upturn in domestic demand. Lower price pressures and interest rates prompted accelerations in private consumption and fixed investment. However, exports growth roughly halved. Turning to the current quarter, our panelists see the economy expanding at a slower pace. That said, October data gives room for optimism: Merchandise exports grew at a brisker annual pace relative to Q3’s average, while tourist arrivals continued to expand at a healthy rate. In other news, in early November, Moody’s upgraded the country’s rating to “B1” from “B2” with a positive outlook, citing robust economic growth and sustained fiscal consolidation efforts. These factors unlocked IMF funding worth USD 756 million in late October.

Costa Rica Inflation

Consumer prices fell 1.3% in annual terms in October, following September’s 2.2% decline. Stronger price pressures for housing and utilities were behind October’s smaller fall. Prices are set to rise again in 2024. However, inflation will remain subdued amid softer economic growth. Commodity price swings and the colón’s strength are key factors to monitor.

This chart displays Economic Growth (GDP, annual variation in %) for Costa Rica from 2013 to 2022.

Costa Rica Economic Data

2018 2019 2020 2021 2022
Population (million) 5.0 5.1 5.1 5.2 5.2
GDP (USD bn) 62.3 64.3 62.3 64.8 69.1
GDP per capita (USD) 12,397 12,662 12,147 12,504 13,214
GDP (CRC bn) 36,015 37,832 36,495 40,327 44,810
Economic Growth (Nominal GDP, ann. var. %) 4.9 5.0 -3.5 10.5 11.1
Economic Growth (GDP, ann. var. %) 2.6 2.4 -4.3 7.9 4.6
Domestic Demand (ann. var. %) 1.7 0.6 -5.0 7.1 2.9
Private Consumption (ann. var. %) 1.9 1.7 -6.9 8.3 3.4
Government Consumption (ann. var. %) 0.6 5.9 0.8 1.7 2.4
Fixed Investment (ann. var. %) 1.6 -8.2 -3.4 7.8 1.5
Exports (G&S, ann. var. %) 4.9 4.3 -10.6 16.0 13.1
Imports (G&S, ann. var. %) 2.9 -2.3 -13.0 19.3 6.0
Unemployment (% of active population, eop) 12.0 12.4 20.0 13.7 11.7
Fiscal Balance (% of GDP) -5.7 -6.7 -8.0 -5.0 -2.5
Public Debt (% of GDP) 51.8 56.4 66.9 68.0 63.8
Money (ann. var. of M2 %) -0.4 6.4 14.3 2.2 -5.0
Inflation (CPI, ann. var. %, eop) 2.0 1.5 0.9 3.3 7.9
Inflation (CPI, ann. var. %, aop) 2.2 2.1 0.7 1.7 8.3
Inflation (PPI, ann. var. %, eop) 4.3 -0.3 2.7 13.9 8.1
Policy Interest Rate (%, eop) 5.25 2.75 0.75 1.25 9.00
Basic Rate (%, eop) 6.00 5.75 3.50 2.90 6.35
Exchange Rate (CRC per USD, eop) 607 574 609 644 599
Exchange Rate (CRC per USD, aop) 578 589 586 623 649
Current Account Balance (USD bn) -1.9 -0.8 -0.6 -1.6 -2.5
Current Account Balance (% of GDP) -3.0 -1.3 -1.0 -2.5 -3.6
Merchandise Trade Balance (USD bn) -4.6 -3.9 -2.0 -2.8 -4.6
Merchandise Exports (USD bn) 11.7 11.8 12.1 14.9 16.7
Merchandise Imports (USD bn) 16.4 15.7 14.1 17.7 21.3
Merchandise Exports (ann. var. %) 8.5 0.9 2.0 23.3 12.3
Merchandise Imports (ann. var. %) 7.7 -4.0 -10.3 25.5 20.6
Foreign Direct Investment (USD bn) 2.5 2.8 1.8 3.2 3.0
International Reserves (USD bn) 7.5 8.9 7.2 6.9 8.6
International Reserves (months of imports) 5.5 6.8 6.2 4.7 4.8
External Debt (USD bn) 29.1 30.8 30.9 31.6 35.1
External Debt (% of GDP) 46.8 47.9 49.7 48.9 50.7

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