Economic growth is slowing in Costa Rica
Costa Rica - COVID-19 economic growth -Update 2020
According to the IMF, Costa Rica's GDP grew an estimated 2.1% in 2019, slightly less than the previous year (2.7%). The deceleration of the growth rate was largely attributed to a difficult fiscal situation in the country, as well as the political turmoil in Nicaragua, a key trade partner and transit zone for exports to Central America. According to the updated IMF forecasts from 14th April 2020, due to the outbreak of the COVID-19, GDP growth is expected to fall to -3.3% in 2020 and pick up to 3% in 2021, subject to the post-pandemic global economic recovery.
Costa Rica - growth -Update 2019
Costa Rica, the Monthly Economic Activity Index reported a 1.3% year-on-year increase in May, one of the lowest growth rates reported in recent years, since a similar variation had not been registered since November 2013.
Excluding financial services and electricity and water, the rest of the economic activities grew less, or even had negative variations with respect to the previous year, as in the case of the agricultural industry, construction and trade, reported the Central Bank of Costa Rica (BCCR).
A good example of the slow down is the exportation of pineapples. In 2018 Costa Rica, the export of pineapples were $779 million. At the beginning of 2019 there were 44,500 hectares dedicated to fruit cultivation in Costa Rica, however, because of high production costs and a drop in international prices, by 2021 the cultivated area could fall to 38,000 hectares.
There are many reasons for the falling down of the exportation:
1. Climatic and market conditions would be the reasons behind the drop in foreign sales expected for this year by exporters of bananas and pineapples in Costa Rica.
2. Another reason of the fall in the price of pineapple internationally is because of increased competition, since countries such as Colombia, Ecuador and Panama, have managed to gain market share in the U.S. and Europe.
En Costa Rica el Índice Mensual de Actividad Económica reportó en abril una alza interanual de 1,6%, variación que es menor al crecimiento de 1,8% reportado en marzo