Costa Rica: Q4 GDP records softest reading since Q1 2021
March 31, 2022
GDP growth moderated to 9.2% year-on-year in the fourth quarter, from 12.6% in the third quarter. Q4's reading marked the weakest result since Q1.
Private consumption growth improved to 9.0% year-on-year in the fourth quarter, which marked the best reading since Q1 2012 (Q3: +8.3% yoy) as labor market conditions improved and some Covid-19 restrictions were lifted. Government consumption in Q4 was flat (Q3: +3.3% yoy) amid the country’s public budget consolidation efforts. Meanwhile, fixed investment growth accelerated to 14.4% in Q4, compared to the 8.3% increase in the previous quarter.
Exports of goods and services growth slowed to 20.0% in Q4 (Q3: +29.7% yoy). In addition, imports of goods and services grew by 27.3% in Q4 (Q3: +16.1% yoy).
Moving forward to Q1 of 2022, GDP is expected to have expanded at a slower rate than previous quarters owing to a fading base effect, compounded by slower U.S. growth. Political uncertainty will remain a risk to economic growth, as will Costa Rica’s persistently high unemployment rate; a trend which likely worsened in January–March due to surging inflows of refugees from Nicaragua.