Strike's Real Impact

In September, economic activity in Costa Rica barely grew 2.5%, 0.3% over the previous month, mainly because of the effects of the activity stoppage caused by public employee unions.

Tuesday, November 13, 2018

The Central Bank of Costa Rica reported that the country's production, measured by the trend cycle series of the Monthly Economic Activity Index (IMAE), presented in September 2018 a year-on-year growth of 2.5%, which is 0.3 percentage points (p.p.) lower than the year-on-year growth of the previous month and 0.6 p.p. to September 2017.

The slowdown observed reflected the effect on economic activity of both demand factors (internal and external), as well as cyclical effects on supply. On the demand side, the moderate growth of credit to the private sector was highlighted before the increases in uncertainty when no solution was found to the structural problem of public finance.

On the other hand, the political situation in Nicaragua caused a reduction in Nicaraguan demand for the export products. In addition, the difficulties caused for the transit to the rest of Central America of the exportable supply.

At the same time, economic activity in September showed the effects of protestations by some trade union organizations in opposition to the Public Finance Strengthening Law Project.

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