Costa Rica: GDP growth slows down slightly
March 31, 2014
In the fourth quarter of 2013, GDP expanded 4.2% over the same period of the previous year. The reading came in below the 5.2% increase registered in the third quarter (previously reported: +5.0% year-on-year). The slowdown was mainly driven by a weakening in total investment. In the full year 2013, GDP expanded 3.5%, which was below the 5.2% increase tallied in 2012.
In Q4, domestic demand moderated to a 3.1% expansion over the same period of the previous year (Q3: +4.3% yoy). Total consumption expanded 3.2% in Q4, matching the growth rate registered in Q3. In particular, private consumption rose 3.2% (Q3: +3.1% yoy) and government spending increased 4.0% (Q3: +4.2% yoy). Gross fixed investment expanded 11.7% in Q4, which was below the 14.2% registered in Q3; gross fixed investment continues to be highly supportive of the country's economic growth. Total investment, however, moderated to a 2.8% rise in Q4 (Q3: +7.1% yoy).
On the external side of the economy, exports of goods and services decreased from the 7.5% expansion registered in Q3 to a 5.2% increase over the same period of the previous year in Q4. Imports increased 3.3% in Q4, which was down from the 6.1% expansion tallied in Q3. As a result, in Q4 the external sector's net contribution to overall growth remained at the 1.0 percentage points recorded in Q3.
A quarter-on-quarter comparison corroborates the slight deceleration suggested by the annual figures. In Q4, GDP expanded a seasonally-adjusted 0.66% over the previous quarter, which was below the 1.56% increase seen in the third quarter.
According to the country's Macroeconomic Program 2014-2015, the Central Bank expects the economy to expand 3.8% in 2014. FocusEconomics Consensus Forecast panelists are in line with the Central Bank and expect GDP to expand 3.8% in 2014, which is unchanged from last month's projection. For 2015, participants see economic growth accelerating to 4.1%.
Author: Armando Ciccarelli, Head of Data Solutions