Costa Rica’s Economy Slowing Down

Indicators show a loss of dynamism in the Costa Rican economy, which fell from a year on year growth of 7.2% in February, to 2.39% in October.

Monday, December 17, 2012

The editorial in notes the risks posed for next year, 2013, for Costa Rica's economy, if the symptoms which have been noticed deepen, either because of global economic vicissitudes, or from lack response from the government or private economic participants.

The high cost of money is a serious obstacle to productive activities, noting the hesitant drop in interest rates in recent weeks, which should be more pronounced if we are to encourage production and development. The uncontrolled influx of capital, as a result of excess global liquidity is another threat to the stability and predictability of the exchange rate.

"The graph of annual production in the past five years looks like a roller coaster. In the context of this potentially delicate situation, it is up to the ministries of Planning and Economy, together with the Central Bank, to develop a comprehensive plan and present it to the country early next year, before the political wind changes."

More on this topic

Costa Rica: Economy Continues to Lose Strength

July 2015

With a meager 1.1% growth in economic activity in April, there has now been a total of thirteen consecutive months of economic slowdown.

From a statement issued by the Central Bank of Costa Rica:

In April 2015, domestic production, measured by the numerical trends in the Monthly Economic Activity Index (IMAE), showed a variation of 1.1% (average rate of 1.7%); lower than that observed in the same period last year (4.1%) and than the average rate for 2014 (3.8%). Like the previous month, most industries showed slower growth in productivity and, in particular, manufacturing and agriculture, with a combined weight of 36.2% in the general index, posted declines of 3.3% and 3 , 0%, respectively. To a lesser extent, there was a drop in production of electricity and water (with a weight of 3.0%), which had performed positively the previous year.

Costa Rica: Activity Falls Due to Less Domestic Demand

March 2015

The Central Bank has confirmed the decline in domestic demand mainly in agriculture, trade, hotels and restaurants, and transport and storage.

From a statement issued by the Central Bank of Costa Rica (BCCR):

The country's economic activity, measured by the cycle trend of the Monthly Index of Economic Activity (IMAE), recorded a variation of 2.9% in January 2015, 0.4% lower than that observed a year earlier when production grew by 3.3% and 0.7% lower than the average growth of the indicator in 2014 (3.5%).

Costa Rica's Economy Losing Strength

November 2011

Industry, trade and agriculture, which together make up half the country's GDP, are showing signs of slow-down, which in turn will impact growth targets for 2011 and 2012.

Costa Rica's economic activity indicator for August displayed an increase of 4.2% for trade, lower than in previous months. Since last May, Industry growth has been stagnant at 3.5% relative to 2010, while the agricultural sector has started to fall.

Costa Rica: Inflation Not Caused by Growth

November 2010

The variation of IMAE in September was 3.08%, highlighting the slowdown trend observed since February.

February was the month which recorded the highest figure of the year: 6.30%.

However, this indicator has been declining significantly and is converging to the values observed (3.08%) since June of this year, indicating a significant stabilization.

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