Economic Growth Expectations Downwards

For the Central Bank of Costa Rica, the projection of growth in production, which for this year is 3.2%, should be reviewed downward, because of the evolution that has shown the economic activity during the first half.

Wednesday, July 10, 2019

Considering the shocks that have affected national production so far in 2019, it is likely that this year economic growth will be below the 3.2% projected in the 2019-2020 Macroeconomic Program last January, explains the most recent report of the Central Bank of Costa Rica (BCCR).

For the BCCR the year-on-year variation of the Monthly Index of Economic Activity (MIEA) in April 2019 was explained in 80% by manufacturing and business services, education, health and financial. Compared to the same month in 2018, most economic activities moderated their growth and even the agricultural, construction and trade industries showed a fall.

You may be interested in “How to Deal with the Economic Slowdown?” and "Costa Rica: Production Keeps Falling”.

Not only will the BCCR review its projections, as José Antonio Cordero, director of the Instituto de Investigaciones en Ciencias Económicas (IICE), in an interview indicated to that "... in January the growth projection of this center for 2019 was between 2.75% and 3.25%. We have a preliminary revised projection of a range of between 1.9% and 2.3%'."

Economist Francisco de Paula Gutiérrez said that "... The manifestations in terms of employment of the monthly index of economic activity; the concern of the Central Bank reiterated when it takes decisions to reduce the rate of monetary policy, to reduce the reserves, makes us anticipate that this economy is growing at a much slower pace than we expected in December."

See BCCR report.

More on this topic

Economic Outlook for the New Year

January 2019

Excluding Nicaragua, the economies of Central American countries are projected to increase 2%, however, for the business sector some of the expectations may be too optimistic.

The 5.6% growth estimate for Panama is too optimistic for the private sector, as no major changes are expected compared to 2018.

Central America Towards 2019

December 2018

Higher domestic demand and increased investment are the factors that will influence the 3.3% growth forecast for the regional economy next year.

According to forecasts by the Economic Commission for Latin America and the Caribbean (ECLAC), in 2019 Panama will be the economy with the highest growth in Central America, with an expected rate of 5.6%.

Economic recession caused by the crisis

October 2018

New World Bank projections estimate that because of Nicaragua's political crisis, the country's GDP will fall 4% this year and 1% in 2019.

According to the expectations of the international organization, Nicaragua will be the only economy that will decrease in Central America, because of the political and social crisis in which the country is involved since last April, it is expected that the Gross Domestic Product (GDP) will decrease 3.8% in 2018 compared to 2017.

Costa Rica: Household Spending Continues to Grow

October 2011

Between January and July the Gross Domestic Product (GDP) grew by 3.8% compared to the same period in 2010.

According to a report by Aldesa :

In terms of components, final household spending remains strong, growing by 4.8% in the indicated period and keeping in line with the expectations of the Central Bank of Costa Rica (BCCR), which estimates that domestic demand this year will be main driver of economic activity.

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