Costa Rica: GDP growth gathers steam in Q2
The Costa Rican economy picked up pace in the second quarter of 2023, when GDP growth accelerated to 5.1% year on year, up from the prior quarter’s 4.4% increase. Q2’s upturn was the strongest since Q1 2022.
Domestically, the improvement was broad-based; private consumption grew at a stronger annual 3.8% in Q2, accelerating from Q1’s 3.1%. Inflation averaged 0.7% in Q2, the lowest level since Q1 2021, alleviating the pressure on households’ disposable income and purchasing power. Moreover, government spending returned to growth, posting a 0.5% expansion in Q2, contrasting Q1’s 0.5% decline. Lastly, fixed investment growth sped up to 9.6% in Q2 (Q1: +2.5% yoy), likely thanks to lower interest rates.
Turning to the external sector, exports of goods and services growth eased to 14.2% year on year in Q2, down from the prior quarter’s 15.6% increase. Conversely, imports of goods and services growth accelerated to an annual 13.4% in Q2 (Q1: +2.6% yoy). Consequently, the external sector likely contributed to overall GDP growth.