Costa Rica Economic Outlook
February 12, 2019Economic growth slowed to a five-year low in 2018, according to preliminary data released in January by the Central Bank, due to weak consumption growth and sluggish fixed investment. Although GDP data for the fourth quarter will only be released on 29 March, the Central Bank’s monthly economic activity index has already shown a sharp growth slowdown in Q4. This was likely the consequence of widespread protests against new fiscal reform measures, which notably include the replacement of the old general sales tax with a VAT and compelled thousands of Costa Ricans to take to the streets between early-September and mid-December. The mining and quarrying; agriculture, forestry and fishing; and education and healthcare sectors were all particularly downbeat in Q4. Against this backdrop, the unemployment rate rose to a multi-year high in the quarter. More positively, the fiscal deficit narrowed slightly in 2018 compared to 2017.
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 down 0.1 percentage points from last month’s forecast, and 3.0% in 2020.
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|Exchange Rate||611.3||-0.57 %||Feb 14|
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Costa Rica Economic News
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.
January 8, 2019
Consumer prices rose 0.21% in December compared to the previous month, down from 0.42% in November.
December 21, 2018
The economy grew at a substantially slower pace in the third quarter of 2018, according to the Central Bank.