QCOSTARICA — Export figures for the end of the year are expected to show an increase of close to 7%, however, expected is a deceleration in the sector’s growth attributed to the decrease in the dollar exchange rate and interest rates, both domestically and globally.
This decrease in the growth rate is evident both in companies in free zones and in the definitive regime.
In the first case, during the first half of the year, a growth of 9.4% was reported, which is much lower than the 25.8% of the previous period of 2023.
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For their part, companies in the definitive regime only recorded a growth of 2.1% for the first half of 2024, versus 5.9% for the same period last year.
In summary, the free zones reported a decrease of 16.4 percentage points, while the definitive regime reports a reduction of 3.8 percentage points.
The fall in the U.S. dollar of almost 22% so far this year represents a hard blow for entrepreneurs, since they receive less profits from their external sales, especially if their administrative or operating expenses are in colones.
The expectation is that the dollar exchange rate will close between ¢530 and ¢540 per unit this 2024. This Wednesday morning, the Central Bank reference rate for the buy was ¢514 and the sell was ¢521, several colones lower than at the close of last week; at the banks and financial institutions, the exchange rate ranges between ¢505 and ¢513 for the buy and ¢524 and ¢532 for the sell.
Furthermore, the persistence of high interest rates, both domestically and globally, has led to a decrease in consumer spending by both local and foreign.
“The problem lies in the combination of an adverse financial environment and the appreciation of the colon, which has eroded the competitiveness of Costa Rican products in the global market. We are dragging an exchange rate that makes us lose competitiveness, especially in agricultural exports,” said Greivin Salazar, an economist at the Universidad Nacional (UNA).
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Despite this, foreign sales report a not-inconsiderable growth of 7%, rising US$774 million and reaching US$113. billion, according to data from the Foreign Trade Promoter.
The main products exported in these seven months of 2024 are: medical devices (42%), pineapple (7%), banana (6%), syrups and concentrates for the preparation of soft drinks (4%), and green coffee (2%).
“This growth is mainly due to the free trade zones that are showing their face, but, above all, manufacturing companies. However, there will be a slowdown that will continue towards the end of the year. Agriculture is lagging behind and this affects the indicator of domestic companies,” Daniel Suchar, an independent financial analyst, told La Republica.
On the other hand, the expectations for 2025 are not encouraging at all. However, a slight recovery in global demand is expected, especially if geopolitical conflicts and economic tensions in key markets continue.
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The slowdown in sales is a cause for concern for both the export and import sectors and economists, which is why they are calling for a higher exchange rate.
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