Costa Rican economy expected be the second fastest growing in Central America in 2024

QCOSTARICA — Costa Rica is expected to have the second highest economic growth in the region, according to an analysis by Strategy&Negocios magazine published earlier this month.

The study projects the GDP growth of the Central American economies for the coming months, based on estimates from four international organizations: ECLAC, the World Bank, the International Monetary Fund (IMF), and the UN Department of Economic and Social Affairs (DESA).

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In Costa Rica’s case, the Gross Domestic Product (GDP) is expected to increase this year between 3.2 and 3.9%, placing it only below Panama, which would see a grow between 4 and 4.6%.

In third place is Honduras with a growth range between 3.2 and 3.5%, followed by Guatemala with 3.1 and 3.5%.

Nicaragua is ranked second to last with a maximum projection of 3.3% and a minimum of 2.8%.El Salvador is the only country with a forecast of less than 2% in the Central American region.

Inflation, which is the general increase in prices, will no longer be the biggest economic problem in 2024, but its effects could persist for a while, the report notes.

Since 2022, most countries in the region have seen a decrease in inflation, according to ECLAC.

In September 2023, in Central America, all countries, except Honduras with an inflation of 6.1%, had inflations below that average. Meanwhile, Costa Rica had a deflation of -2.2%.

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“This year cannot be explained without contextualizing the Covid pandemic. For the Central American region, this meant a decline of -7.6% in the Gross Domestic Product in 2020 and a subsequent rebound of 10.5% in 2021, which slowed to 5.5% in 2022 and 4.1% in 2023. , according to data from the World Bank,” the publication reads.

In this sense, Central America has faced the economic challenges of the pandemic with resilience, but growth above its potential is not expected in 2024 according to the analysis.