Costa Rica Economic Outlook
March 12, 2019The economy slowed in 2018 due to weak consumption growth and sluggish fixed investment, according to preliminary data released by the Central Bank. Although GDP data for the fourth quarter will only be released on 29 March, the Central Bank’s monthly economic activity data points to a sharp slowdown in the final months of the year. This is likely due to public street protests against new fiscal reform measures including the replacement of the old general sales tax with a VAT. On 25 February, the IMF said the fiscal reform was critical to restoring sustainability of government finances; however, the Fund also stated that additional consolidation steps should be pursued to reduce the government’s high near-term financing needs. Meanwhile, a vast new industrial port was inaugurated in Limón on 28 February, which will significantly enhance the maritime connectivity of Costa Rica.
Costa Rica Economic GrowthStronger fixed investment growth on the back of a more certain and sustainable fiscal outlook, coupled with solid export growth linked to a weaker colón and robust U.S. demand, should lead to an uptick in economic growth this year. That being said, fiscal austerity and tighter monetary conditions, compounded by ongoing instability in neighboring Nicaragua, could limit growth prospects. Met the why particular Consensus Forecast panelists expect GDP to grow 2.8% in 2019, which is unchanged from last month’s forecast, and 3.0% in 2020.
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|Exchange Rate||607.2||-0.57 %||Mar 11|
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Costa Rica Economic News
March 14, 2019
Annual economic growth in cyclically-adjusted terms was unchanged in January from December’s revised 1.6% reading (previously reported: +1.8% year-on-year), according to the monthly index of economic activity published by the Central Bank of Costa Rica.
March 7, 2019
Consumer prices rose 0.08% in February compared to the previous month, up slightly from the 0.05% increase in January.
February 11, 2019
Cyclically-adjusted annual economic growth slowed to 1.8% in December from 1.9% in November, representing the lowest growth rate since December 2013.
February 8, 2019
Consumer prices rose 0.05% in January compared to the previous month, down from 0.21% in December.
January 11, 2019
Working-day adjusted annual growth in economic activity slowed to 1.9% in November from 2.1% in October, representing the lowest growth rate since December 2013.