Costa Rica: GDP marks largest expansion in over a year
December 30, 2013
In the third quarter of 2013, GDP expanded 5.0% over the same period of the previous year. The reading came in above the 3.0% increase registered in the second quarter (previously reported: +3.4% year-on-year). The expansion was mainly driven by an improvement in external demand.
Domestic demand expanded 2.9% over the same period of the previous year (Q2: +5.6% yoy). Total consumption expanded 3.2% in Q3, inching up from the 3.1% increase recorded in the previous quarter. In particular, private consumption rose 3.1% (Q2: +3.0% yoy) and government spending increased 4.2% (Q2: +4.0% yoy). Gross fixed investment expanded 10.4% in Q3, which was up from the 7.6% registered in Q2; gross fixed investment continues to be highly supportive of the country's economic growth. Total investment, however, moderated to a 2.1% rise in Q3 (Q2: +12.5% yoy).
On the external side of the economy, exports of goods and services improved from the 3.1% expansion registered in Q2 to a 7.9% increase over the same period of the previous year in Q3. Imports increased 4.4% in Q3, which was down from the 7.7% expansion tallied in Q2. As a result, the external sector's net contribution to overall growth rebounded from minus 2.3 percentage points in the second quarter to plus 2.1 percentage points in Q3.
A quarter-on-quarter comparison corroborates the acceleration suggested by the annual figures. In Q3, GDP expanded a seasonally-adjusted 1.4% over the previous quarter, which was just a tick below the 1.5% increase seen in the second quarter.
According to the latest revision to the country's Macroeconomic Program 2013-2014, the Central Bank expects the economy to expand 3.7% in 2014. FocusEconomics Consensus Forecast panelists are slightly more optimistic than the Central Bank and expect GDP to expand 3.8% in 2014, which is down 0.1 percentage points from last month's projection. For 2015, participants see economic growth accelerating to 4.4%.