Costa Rica Economic Outlook - November 9, 2021
After GDP grew at the fastest rate in 23 years in Q2, high-frequency indicators hint at a continued recovery through the third quarter. Economic activity grew at a strong pace in July–August, gaining steam from Q2’s average amid a surge in the construction sector. Moreover, both merchandise exports and imports grew at faster rates on average in July–September compared to Q2.
Turning to Q4, thanks to a swift vaccination campaign and a dramatic fall in the number of new Covid-19 cases, authorities recently opted to ease mobility-related restrictions from 1 November and business-related restrictions from 1 December.
Among the most important changes, businesses that require proof of vaccination may begin to operate at full capacity. Regardless, starting from 8 January 2022, all firms must require vaccine certificates.
Costa Rica's Economic Growth
In 2022, GDP is expected to grow at a healthy albeit more moderate pace as the base effect subsides and activity returns somewhat to normal. Fixed investment is projected to expand at a robust rate, spearheading overall growth. Risks to the outlook persist due to lingering uncertainty over the evolution of the pandemic and the spread of new Covid-19 variants. FocusEconomics panelists see GDP expanding by 3.4% in 2022, which is unchanged from last month’s forecast, and 3.0% in 2023.
Costa Rica - COVID-19 economic growth -Update 2020
Economic growth is slowing in Costa Rica
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 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 slowdown is the exportation of pineapples. In 2018 Costa Rica, the export of pineapples was $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 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 for 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
Actividad económica rompe ritmo de crecimiento pero es mayor a la de hace un año
El Índice Mensual de Actividad Económica (IMAE) registró una variación interanual de 4,4% en julio de este 2017, 0,9 puntos porcentuales (p.p.) por encima del nivel visto al mismo mes de 2016, pero por debajo del crecimiento de junio (4,59%).