Costa Rica GDP

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Costa Rica: Economy continues to grow at robust pace in Q3

December 30, 2014

In the third quarter of 2014, GDP expanded 3.6% over the same period of the previous year, matching Q2’s reading. Q3’s expansion reflects that an improved performance of the external sector compensated for subdued domestic demand

In Q3, domestic demand moderated from Q2’s 1.3% rise to a weaker 0.1% expansion. Total consumption expanded 3.8% in Q3 (Q2: +3.7% year-on-year). In particular, private consumption rose 3.9% (Q2: +3.7% yoy) while government spending recorded a 3.5% expansion in Q3, matching Q2’s print. Gross fixed investment expanded 0.6% in Q3, which was notably below the 5.5% rise registered in Q2. Total investment deteriorated further from Q2’s 4.7% contraction to a 9.7% drop in Q3.

On the external side of the economy, exports of goods and services swung from the 1.0% expansion registered in Q2 to a 2.0% contraction in Q3. Imports fell from Q2’s 3.2% decrease to a 8.6% contraction in Q3. As imports dropped at a faster pace than exports, the external sector’s net contribution to overall growth improved from the 2.3 percentage points recorded in Q2 to 3.6 percentage points in the third quarter.

In seasonally-adjusted terms, in Q3 GDP expanded 0.7% over the previous quarter, coming in below the 1.3% increase seen in the second quarter.

The Central Bank expects the economy to expand 3.4% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to expand 3.6% in 2015, which is down 0.1 percentage points from last month’s projection. For 2016, participants see economic growth accelerating to 3.8%.

Author: Teresa Kersting, Economist

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Costa Rica GDP Chart

Costa Rica GDP Q314 1

Note: Year-on-year changes of GDP in %.
Source: Costa Rica Central Bank (BCCR) and FocusEconomics Consensus Forecast.

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