Costa Rica GDP

Costa Rica

Costa Rica: GDP picks up slightly in Q1

June 30, 2014

In the first quarter of 2014, GDP expanded 4.3% over the same period of the previous year. The reading came in marginally above the 4.2% increase registered in the fourth quarter. The modest acceleration was mainly driven by improving domestic demand that more than offset a deterioration in the external sector.

In Q1, domestic demand rose to a 3.9% expansion over the same period of the previous year (Q4: +3.1% year-on-year). Total consumption expanded 3.5% in Q1 (Q4: +3.2% yoy). In particular, private consumption rose 3.5% (Q4: +3.2% yoy) while government spending fell from Q4’s 4.0% expansion to a 3.3% increase in Q1. Gross fixed investment expanded 4.7% in Q1, which was markedly below the 11.7% rise registered in Q4. Total investment, however, picked up from a 2.8% rise in Q4 to a 4,9% expansion in Q1.

On the external side of the economy, exports of goods and services decreased from the 5.2% expansion registered in Q4 to a 3.3% increase over the same period of the previous year in Q1. Imports increased 2.6% in Q1, which was down from the 3.3% expansion tallied in Q4. As a result, the external sector’s net contribution to overall growth fell from the 1.0 percentage points recorded in Q4 to 0.4 percentage points in Q1.

A quarter-on-quarter comparison corroborates the slight acceleration suggested by the annual figures. In Q1, GDP expanded a seasonally-adjusted 0.89% over the previous quarter, which exceeded the 0.63% increase seen in the fourth 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 4.0%.

Author: Teresa Kersting, Economist

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Costa Rica GDP Chart

Costa Rica GDP Q114 0

Note: Year-on-year changes of GDP in %.
Source: Costa Rica Central Bank (BCCR) and FocusEconomics Consensus Forecast.

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