Costa Rica: GDP growth continues slowdown in Q1
July 1, 2015
In the first quarter of 2015, GDP expanded 2.6% over the same period of the previous year, coming in below Q4’s 3.0% increase and marking the weakest expansion since Q1 2013. Q4’s deceleration reflects that a drastic deterioration in the external sector was partially offset by an improvement in domestic demand.
In Q1, domestic demand increased from Q4’s 1.1% rise to a much stronger 4.1% expansion, the strongest pace of growth in a year. Total consumption expanded 4.4% in Q1 (Q4: +4.0% year-on-year), the fastest pace since Q1 2011. Private consumption rose 4.5% (Q4: +4.1% yoy) while government spending recorded a 3.7% expansion in Q1, up slightly from Q4’s print of 3.5%. Gross fixed investment rebounded to a 1.0% expansion in Q1, which contrasted the 1.3% contraction registered in Q4. Total investment also rebounded from Q4’s drastic contraction of 10.0% to a 3.5% expansion in Q1.
On the external side of the economy, exports of goods and services registered an 11.1% contraction in Q1 (Q4: -8.0% yoy). Imports also contracted, falling 8.3%, which was up from Q4’s 11.3% decrease. As exports dropped at a faster pace than imports, the external sector’s net contribution to overall growth deteriorated to minus 1.5 percentage points from the plus 1.9 percentage points recorded in Q4.
In seasonally-adjusted terms, GDP expanded 0.2% in Q1 over the previous quarter, coming in above the 0.8% contraction seen in the fourth quarter.
Author: Robert Hill, Economist