Costa Rica Economic Forecast

Costa Rica Economic Outlook

April 9, 2019

The economy grew at the slowest pace in nearly six years in the fourth quarter of 2018 as large public protests related to fiscal policy reform ate into economic activity. Private consumption growth slowed and was likely hampered by a large increase in unemployment, a weak increase in private sector loans and downbeat consumer confidence. Moreover, fixed investment also increased at a slower pace and the cash-strapped government slashed spending, while export growth remained strong despite moderating in the quarter. Turning to this year, higher consumer confidence in the first quarter bodes well for private spending, although consumers remained overwhelmingly pessimistic. In addition, although economic activity growth in January was weak, it did not change from December, putting an end to eight consecutive months of slowing growth.

Costa Rica Economic Growth

This year, stronger fixed investment growth on the back of a more certain fiscal outlook should lead to an uptick in economic growth. Moreover, solid export growth linked to a weaker colón and February’s opening of a large industrial port in Limón should add to economic momentum. Ongoing instability in neighboring Nicaragua, however, could weigh on exports. Met the why particular Consensus Forecast panelists expect GDP to grow 2.8% in 2019, which is unchanged from last month’s forecast, and 2.9% in 2020.

Costa Rica Economy Data

20132014201520162017
Population (million)4.74.84.94.95.0
GDP per capita (USD)11,44911,33811,85011,66711,657
GDP (USD bn)45.446.550.352.452.9
Economic Growth (GDP, annual variation in %)2.33.53.64.23.2
Consumption (annual variation in %)3.03.94.23.32.7
Investment (annual variation in %)-0.33.33.04.0-3.1
Unemployment Rate8.39.79.69.59.3
Fiscal Balance (% of GDP)-5.4-5.6-5.7-5.3-6.2
Public Debt (% of GDP)35.838.411.945.049.2
Money (annual variation in %)11.911.613.97.39.5
Inflation Rate (CPI, annual variation in %, eop)3.75.1-0.80.82.6
Inflation Rate (CPI, annual variation in %)5.24.50.80.01.6
Inflation (PPI, annual variation in %)1.44.9-0.40.33.1
Benchmark Interest Rate (%)6.507.205.954.455.95
Exchange Rate (vs USD)500.7511.8537.3553.2571.4
Exchange Rate (vs USD, aop)501.0537.2534.6544.0567.9
Current Account (% of GDP)-5.4-5.3-3.8-2.8-3.2
Current Account Balance (USD bn)-2.4-2.5-1.9-1.5-1.7
Trade Balance (USD billion)-6.4-6.4-5.5-5.4-5.3
Exports (USD billion)8.69.19.29.911.6
Imports (USD billion)15.115.614.715.315.9
Exports (annual variation in %)-1.15.60.77.87.0
Imports (annual variation in %)1.23.1-5.23.64.3
International Reserves (USD)7.37.27.87.67.1
External Debt (% of GDP)42.946.546.948.750.8

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Costa Rica Facts

ValueChangeDate
Exchange Rate601.7-0.57 %Apr 12

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