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.

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