In Costa Rica, the Monthly Economic Activity Index reported a 1.3% year-on-year increase in May, one of the lowest growth rates reported in recent years, since a similar variation had not been registered since November 2013.
The trend series of the Monthly Index of Economic Activity 1 registered in May 2019 a 1.3% year-on-year growth, which is lower by 2 percentage points (p.p.) to the same month of the previous year and by 0.2 p.p. to the previous month, informed the Central Bank of Costa Rica (BCCR).
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.
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).
In the first quarter of the year, the country's Gross Domestic Product increased 1.8% year-on-year, lower than the 3.3% reported in the same period in 2018, which is partly explained by the fall in the prices of some agricultural export products.
According to the report of the Central Bank of Costa Rica, the slowdown combined external and internal factors, among which stand out:
In Costa Rica, the Monthly Economic Activity Index reported a 1.6% year on year increase in April, a variation that is lower than the 1.8% growth reported in March.
Excluding financial services and electricity and water, the rest of the economic activities grew less, or even had negative variations with respect to the previous year, as in the case of the agricultural industry, construction and trade, reported the Central Bank of Costa Rica (BCCR).
The effects of the reduction in the Monetary Policy Rate and the lowering to 12% of the minimum legal reserve for banks will take months to be perceived, and without other parallel actions that impact the business sector more quickly and effectively, the economic reactivation of Costa Rica will not be possible in the short term.
According to the latest report of the Central Bank of Costa Rica (BCCR), when comparing the level of economic activity recorded in March this year with the same month of 2018, it is observed that most economic activities slow down their growth, which was reflected in the slowdown of the general indicator. See full report.
In Costa Rica, the Monthly Economic Activity Index reported a 1.8% year-on-year increase in March, and business, education, health and financial services accounted for 60% of the increase.
Compared with March 2018, most economic activities moderated their growth, which was reflected in the deceleration of the overall indicator. The agricultural industry and trade were the only ones to show a decline, explains a report by the Central Bank of Costa Rica (BCCR).
The low dynamism of the commercial activity and the high unemployment, are the main reasons behind the fall in the consumption in Costa Rica, and great changes are not expected in the short term.
In February 2019, the country's production, measured according to the Monthly Economic Activity Index, registered a 1.7% year on year variation, informed the Central Bank of Costa Rica.
For the IDB, investment in infrastructure is the most important priority when increasing the probability of improving productivity and reaching higher per capita income levels in the countries of the region.
The Inter-American Development Bank (IDB) published its report "Building Opportunities for Growth in a Challenging World," in which it addresses the benefits of infrastructure investment and its influence on productivity growth in the countries of the region.
In February 2019 in Costa Rica the Monthly Index of Economic Activity reported a 1.7% year on year increase, mainly because of the behavior of construction and services.
In February 2019, the country's production, measured with the Monthly Economic Activity Index, registered a 1.7% year-on-year variation, higher by 0.12% (p.p.) than the data registered in December (month that presented the lowest growth of 2018). With this result the variation of the last twelve months stood at 2.4%, reported the Central Bank of Costa Rica (BCCR).
Guatemala and El Salvador are the Central American economies that have registered the lowest levels of economic growth, when this is associated with the size of their public sector.
Panama, Nicaragua, Honduras and Costa Rica are the countries that would be obtaining exceptional results in their economic growth from the average expenditure of the region during 2011 to 2018, which could be associated with the investment made in past periods, informed the Central American Institute of Fiscal Studies (Icefi).
During January 2019, the Monthly Index of Economic Activity in Costa Rica reported a 1.6% year-on-year increase, which is less than the 3.2% recorded in the same month last year.
With the exception of construction, all economic activities were less dynamic than in January 2018.
Reducing the income tax exemption threshold for individuals, increasing property taxes and raising VAT from 13% to 15% is part of the institution's proposal, arguing that in the country "the tax/GDP ratio is relatively low."
In the medium term, the positive effects on confidence and progress of structural reforms, including those related to OECD membership, should reduce risk premia and stimulate investment, boosting growth to 3.25%, reported the International Monetary Fund (IMF).
Because of the strong impact of the strike of public employees in the last months of the year, at the end of 2018 economic activity in Costa Rica reported a growth of just 2%, down from 3% reported at the end of 2017.
As of December 2018, the majority of economic activities moderated their growth with respect to what was observed in the same month of the previous year, with a 1.8% year-on-year variation in the general IMAE indicator, informed the Central Bank of Costa Rica.
During November 2018, the Monthly Index of Economic Activity in the country reported a 2% year-on-year increase, which is less than the 3% increase recorded in October last year.
Compared with November 2017, most economic activities moderated their growth, which was reflected in the slowdown of the overall indicator. This result was determined by the deterioration in consumer confidence, a persistence of protest movements of some trade unions in opposition to the fiscal reform and problems in trade flows with Central America given the socio-political situation of Nicaragua, reported the Central Bank of Costa Rica.
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