Economic Growth Is Not Accelerating

In the second quarter of the year, Costa Rica's GDP grew 1.4% year-on-year, below the 3% reported for the same period in 2018, which is associated with the evolution of internal demand and external demand for the production of companies under the definitive regime.

Wednesday, October 2, 2019

In the second quarter of 2019, the country's economic activity, as measured by the trend of the Gross Domestic Product (GDP) cycle, grew 1.4%, continuing the loss of dynamism observed since the second quarter of 2018, reported the Central Bank of Costa Rica (BCCR).

The document explains that "... External demand reflected the dynamism in exports of services (business management, information technology and design of devices for dental treatment as well as the entry of tourists) and sales of medical supplies (special regime), which mitigated the contraction in sales of the final regime because of a lower exportable supply of bananas, pineapples and coffee, as well as the negative impact that the social-political situation in Nicaragua caused on trade flows of this group of companies, with the Central American region.

Household final consumption grew 1.4%, a rate that although positive is lower than the average annual variation of the last two years (2.4% in 2017-2018), which was consistent with the results of the Consumer Confidence Survey, prepared by the University of Costa Rica, which so far this year has shown an increase in pessimism. Likewise, this result was congruent with the lower growth of credit to the private sector for consumption (2.5% from 5.9% in the second quarter of 2018), the behavior of real disposable income and the unemployment rate (11.3%).

On the other hand, gross fixed capital formation deepened its fall (-6.9% from -1.6% in the previous quarter), mainly because of lower spending on non-residential private works for commercial purposes. Also influenced by the reduction in investment in industrial and transportation equipment

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According to the report of the Central Bank of Costa Rica, the slowdown combined external and internal factors, among which stand out:

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Costa Rica's GDP increases 3%

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As a result of an increase in investment in new constructions and in the final consumption of households, GDP increased 3.3% year-on-year in the second quarter of the year.

During the second quarter of 2018, the economic activity volume, measured with the trend of the Gross Domestic Product (GDP) cycle, increased at an annualized rate of 3.6%, mainly as a result of an increase in investment in new buildings and final consumption of households. In the year-on-year comparison, production registered a growth of 3.3%, according to the Central Bank of Costa Rica.

Costa Rica: 3% Growth in GDP

July 2018

Explained by a higher household consumption, in the first quarter of the year in Costa Rica the GDP registered a year-on-year growth of 3%.

The Central Bank of Costa Rica reported that "... In the first quarter of 2018, economic activity, measured by the trend of the real Gross Domestic Product (GDP), grew at an annualized rate of 3.2%, mainly as a consequence of higher spending on final household consumption, in gross capital formation and, to a lesser extent, in exports of goods. In the year-on-year comparison, production registered growth of 3.0%."

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