QCOSTARICA — The Costa Rican economy closed 2024 with a growth of 4.1%, driven by high value-added export sectors such as advanced manufacturing and medical devices, in addition to lower inflation.
This is very positive news, since the country will stand out among the 15 economies with the highest growth, surpassing many of the countries that make up the Organization for Economic Cooperation and Development (OECD).
Economic indicators 2024
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The data show stability in the economy during the year:
- GDP 4.1%
- Deflation -0.26%
- Unemployment 6.6%
- Poverty 18%
- Public debt as a percentage of GDP 61%
- Monetary policy rate 4%
At the regional level, Costa Rica grew twice as much as its competitors. In Central America, it will be the undisputed winner, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), the International Monetary Fund (IMF) and the World Bank, among other international organizations.
This shows that “the jaguar is still alive and running,” said Francisco Gamboa, Minister of Economy, Industry and Commerce (MEIC), who added that the drop in inflation, the behavior of the exchange rate and interest rates caused families to feel relief in their pockets and that consumption remained stable.
What’s in store for 2025?
The stability achieved this year makes the projections for 2025 very encouraging.
Gina Carvajal General Manager at the Banco Popular, explains: “Production is being boosted by free zone companies, linked to the export of medical articles. Likewise, growth is observed at the level of industry, commerce, services and construction. It is worth highlighting in this regard the great boom experienced with the growth of the Free Zones outside the GAM, which is why Banco Popular has already assumed a leadership role in the alliance with zones such as Greece, Athens and others in the West.”
Daniel Suchar, Independent Financial Analyst, had this to say: “We expect a very positive year in economic terms and that the exchange rate will return very slowly in the second half of the year to positions above ¢550 per dollar, given the drop in interest rates that is taking place here and in the United States.
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“Now, for next year, deflation could change and once again reach the target range established by the Central Bank.
“This is what economists expect, since prolonged inflation could imply risks, such as the reduction of business investment or less job creation, said Daniel Suchar, financial analyst.
“The reduction in interest rates is another aspect that benefited economic growth, which stood at 4%. This led to more investment and more consumption in a context of low inflation.
“The country managed to meet the fiscal and economic growth objectives established by the International Monetary Fund in 2024. The OECD even praised the regulatory improvements made by Costa Rica in recent years.
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“This is complemented by the improvement in risk ratings, such as those of Moody’s, Fitch Ratings and Standard & Poor’s, which maintained a stable outlook on the Costa Rican economy.
“However, these agencies have warned that the country must prioritize the reduction of its public debt and the strengthening of its fiscal institutions to avoid a deterioration in its credit rating.
“For 2025, the projections are very similar to those of last year. Stable economic growth is expected, which will be around 3.9%.
“However, this could be offset by an increase in inflation, which would return to the Central Bank’s target range of 2% to 4%. The rise in the prices of certain goods and services could reduce the purchasing power of households and, with it, consumption.”
The financial expert closed with, “Despite this, a similar performance is expected, with consumption growth of 3.8%, according to the Central Bank’s projections.”
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