Worrying Economic Outlook

In the first months of the year, the pace of economic activity, employment and bank credit have been slowing down, complicating Costa Rica's economic outlook in the coming months.

Monday, June 25, 2018

During the fourth month of the year, economic activity reported an interannual growth of 2.8%, an increase that is below the average growth rate of 3% reported in the last eight years.  On top of this awards of bank loans went up 6% with respect to February 2017, half the rate it was growing at a year ago.

See: "Public Finances Still Deteriorating"

Regarding the current situation of the local economy, Bernardo Alfaro, head of the General Superintendence of Financial Institutions, explained to Nacion.com that " ...'After the crisis of 2008 this is the most difficult moment without the slightest doubt. The crisis of 2008 did not affect us because we had not contaminated ourselves in the sense that the Costa Rican investment funds, the pension operators did not have international investments in junk products, as happened to many companies (...) happily that didn't come to Costa Rica'. "

Alfaro added that " ...'The situation today is very different because those of us who are in trouble are the Costa Ricans, more than our commercial partners, that is a much more internal problem, but it is still going to be tested, depending on the speed with which we can correct the deficit.'"

Gonzalo Delgado, president of the Union of Chambers and Associations of the Private Business Sector (Uccaep), said that " ...In 2008, it was a global crisis and what we are experiencing today is a complex internal situation ... "What we can agree on is that the solutions must be quick in order to minimize the effects of the current situation.""

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More on this topic

Positive, but Insufficient Projections

January 2019

The Central Bank estimates that Costa Rica's economy will increase by 3.2%, mainly because of private consumption and a rebound in public investment.

According to the Central Bank's 2019-2020 Macroeconomic Program, the Costa Rican economy will increase by 3.2% in 2019 and by 3% in 2020.

Complicated Economic Scenario

September 2018

The deterioration of the economy and rising unemployment are the main reasons behind the difficulties faced by companies and individuals in Costa Rica in paying back their bank loans.

According to figures from the General Superintendence of Financial Entities, between January 2017 and July 2018, the percentage of loans in defaults for more than 90 days or in judicial collection, went from 1.65% to 2.51%, showing an upward trend in recent months.

Tax Reform is Not Enough

August 2018

Businessmen in Costa Rica recognize the importance of the fiscal reform needed by the country, but they are calling on the Alvarado administration to pay attention to equally complex problems, such as unemployment and high production costs.

The business sector has taken stock of the first 100 days of the government of Carlos Alvarado, and in a discussion outlined the urgent challenges facing the country, such as how to achieve economic reactivation, advancing a proposed teleworking law, promoting dual training and investing in improving road infrastructure. 

Guatemala: Modest growth anticipated for 2008

August 2008

The Association for Investigation and Social Studies (ASIES) carried out a moderate study of the local economy.

ASIES analyst, Carlos Gonzalez, pointed out that the unfavorable external climate resulting from the financial crisis, and the high price of oil and food - that started in 2006 and worsened in 2007, began to affect production activities during first semester of this year.

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