After slowing in Q3, growth lost speed again in Q4. Weakening momentum in private spending and exports and a sharper decline in public spending more than outweighed a smaller fall in fixed investment. Elevated inflation, tighter financial conditions and lower external demand weighed on the reading. Turning to Q1, early signs are upbeat. Inflation continued to decelerate in February, reaching a one-year low and benefitting private consumption. Moreover, in January–February, export growth jumped compared to the Q4 average. In other news, IMF funding should aid public spending, while the planned issuance of USD 5 billion in Eurobonds between 2023–2025 bodes well for the government’s short-term funding needs. Moreover, Fitch and S&P Global recently upgraded their credit ratings for Costa Rica to ‘BB-’ and ‘B+’, respectively, citing fiscal position improvements.
Costa Rica Economic Growth (Nominal GDP, ann. var. %) Data
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Economic Growth (Nominal GDP, ann. var. %) | 7.1 | 4.9 | 5.0 | -3.5 | 9.9 |