Costa Rica Economic Snapshot

Economic Forecast Summary (November 2022)

Economic Outlook Note - Costa Rica

GDP will grow by 2.3% in 2023 and 3.7% in 2024. High inflation and a tight monetary policy stance will hold back private consumption in 2023, and fiscal restraint will contain public spending. Exports will be hampered by weaker global growth in 2023 but gain strength in 2024. Annual inflation peaked at 12% recently but is set to decline to 4.2% in year-average terms by 2024, still above the 3% target.

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Key Resources

Reform Priorities (April 2021)

Going for Growth 2021 - Costa Rica

To attain a strong and inclusive recovery top policy priority should be on boosting formal jobs creation, with reforms ranging from removing obstacles to firm entry and competition, to improving the quality of education and training.

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2021 Structural Reform Priorities

Labour market: Reduce barriers to the formalisation of workers and firms
Competition and regulation: Promote domestic firms’ participation in global-value chains
Competition and regulation: Strengthen competition
Public sector: Improve spending efficiency and the performance of the public sector
Education and skills: Enhance the quality and efficiency of the education system

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Economic Survey of Costa Rica (July 2020)

Costa Rica’s social and economic progress has been remarkable. A strong commitment towards trade openness has been key to attract foreign direct investment and move up in the global value chain. The effort to provide virtually universal health and pensions has translated into well-being indicators comparable with OECD standards in several dimensions. Costa Rica has also shown a strong commitment to preserving natural resources. Challenges to retain achieved successes and to continue converging towards higher living standards are substantial. The fiscal situation remains a critical vulnerability. Reform momentum has been extraordinary, as a significant number of legal initiatives linked to OECD accession have been finalised. This includes the fiscal reform approved in December 2018, a historic step to restore fiscal sustainability. These reforms would also facilitate the recovery from the COVID-19 shock. In the short term, addressing the coronavirus outbreak is the overarching priority. Once the recovery is established, full implementation of the fiscal reform is critical to restore medium-term fiscal sustainability, ensure macroeconomic stability and set the basis for higher incomes and wider spread improvements in living standards.