Costa Rica: GDP accelerates in Q2
September 30, 2013
In the second quarter, GDP expanded 3.4% over the same period last year. The reading came in above the 1.4% increase registered in the first quarter.
The acceleration in Q2 was mainly driven by the contribution of domestic demand, which expanded to a 5.0% over the same period last year (Q1: +1.6 year-on-year). Total consumption expanded 3.0% in Q2, inching up from the 2.9% increase seen in the previous quarter. In particular, private consumption rose 3.1% (Q1: +3.0% yoy) and government spending increased 2.4% (Q1: +2.2% yoy). Gross fixed investment was reduced from 9.4% in Q1 to 6.7% in Q2 but remains highly supportive of the country's economic growth. Moreover, GDP benefited from a strong restocking process, which prompted total investment to expand 10.5% (Q1: -1.5% yoy).
On the external side of the economy, exports of goods and services rebounded from the 1.0% contraction registered in Q1, rising 2.6% over the same period last year in Q2. Imports increased 5.5% in Q2, which contrasted the 0.5% contraction tallied in the previous quarter. As a result, the net contribution from the external sector to overall growth fell from minus 0.2 percentage points in the first quarter to a minus 1.4 percentage points in the second.
A quarter-on-quarter comparison corroborates the acceleration suggested by the annual figures. GDP expanded a seasonally-adjusted 1.5% over the previous quarter, which was well above the 0.5% increase seen in the first quarter.
According to the latest revision to the country's Macroeconomic Program 2013-2014, the Central Bank sees the economy expanding 4.0%. FocusEconomics Consensus Forecast panelists are more pessimistic than the Central Bank and see growth at 3.7% this year, which is down 0.1 percentage points from last month's projection. For 2014, participants see economic growth at 4.2%, which is also down 0.1 percentage points from last month's estimate.