Costa Rica Economic Outlook
November 6, 2018The economy likely had a mixed performance in the third quarter of 2018, after year-on-year growth accelerated in the second quarter. In August, economic activity increased at the fastest pace in nearly two years, boosted by a resurgent construction sector. However, union strikes against the landmark fiscal reform bill, which began in early September and continued through October, will have taken a toll on the economy. The fiscal bill passed a crucial vote in the Legislative Assembly in early October but was later rejected in its current state by the Supreme Court for containing changes that could affect the independence of the judiciary. The bill should wind up for a final vote in the Legislative Assembly in the coming weeks and, if approved, would come into effect next year and should help to bring down the deficit. However, the lack of definitive approval is fraying investors’ nerves; the colón has tanked over the last month, and credit rating agency Moody’s recently put Costa Rica on review for a downgrade, citing worsening fiscal metrics.
Costa Rica Economic GrowthRising household consumption and robust exports—aided by economic growth in the United States—should drive the economy next year. However, fiscal consolidation and tighter monetary conditions are seen weighing on prospects, as could instability in neighboring Nicaragua. Failure to enact serious tax reform which puts the public finances on a sustainable footing is a key downside risk to the economy. Met the why particular Consensus Forecast panelists expect GDP to grow 3.1% in 2019, which is down 0.1 percentage points from last month’s forecast, and 3.4% in 2020.
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Costa Rica Facts
|Exchange Rate||611.8||-0.57 %||Nov 15|
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Costa Rica Economic News
November 9, 2018
Annual working-day adjusted growth in economic activity slowed to 2.5% in September from 2.8% in August.
November 7, 2018
Consumer prices rose 0.37% in October compared to the previous month, up from the 0.22% increase in September.
October 11, 2018
In August, annual growth in economic activity inched up to 3.8% from 3.7% in July.
October 5, 2018
Consumer prices rose 0.22% in September compared to the previous month, marking a contrast with the 0.07% fall logged in August.
September 28, 2018
The economy grew at the fastest rate in a year in the second quarter of 2018, according to the Central Bank of Costa Rica.