Costa Rica: GDP expands on stronger external sector
September 30, 2011
In the second quarter, GDP added 4.5% over the same period last year, which was above the 3.0% increase recorded in the first quarter (previously reported: +2.7% year-on-year). The acceleration was driven by an improvement in the external sector, which compensated for weaker domestic demand. Domestic demand slowed to a 3.3% expansion in Q2 from the strong 10.4% increase in the previous quarter, which was entirely due to a negative contribution from inventories. Total consumption expanded 4.5% in Q2, unchanged from the previous quarter, while gross fixed investment expanded 6.7% over the same period last year. Exports of goods and services expanded 6.9%, contrasting the 0.9% contraction recorded in the first quarter, whereas imports decelerated to a 4.8% increase (Q1: +13.8% yoy). As a result, the external sector's net contribution to overall growth swung from minus 6.7 percentage points in the first quarter to plus 1.4 percentage points in the second. At the sector level, the industrial sector rebounded from a 1.2% contraction in the first quarter to a 4.2% expansion, while the services and agricultural sectors accelerated over the previous quarter. According to its July revision of the Macroeconomic Programme 2011-12, the Central Bank sees the economy expanding 4.5% this year, and 4.7% in 2012.