QCOSTARICA — Costa Rica’s dependence on the United States market would mean that the imposition of 10% tariffs on entry to that market would have a strong impact on the Costa Rican economy, resulting in fewer jobs, a reduction in foreign investment, a higher dollar exchange rate, and a marked decline in economic growth.
The warning is issued by economists at the International Center for Economic Policy for Sustainable Development (Cinpe) of the Universidad Nacional(UNA), who revised their growth expectations downward for 2025.
Without tariffs, production would grow 3.6%, and with tariffs, the percentage would be 3%.
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“Costa Rica’s economic growth projections are framed within two possible scenarios, which depend primarily on the performance of international trade, the evolution of the United States economy, and domestic monetary policy conditions,” says researcher Donald Miranda.
For example, 48% of exports from 2020 to 2024 were destined for North America, and almost half (44.5%) of products sold to the United States.
Furthermore, exports to the U.S. market have grown annually, on average, by 7.6%.
On April 9, Trump paused his reciprocal tariffs for a period of 90 days to allow countries to negotiate with the United States government.
He later indicated that some countries could begin paying the tariff ‘in the coming weeks’.
This has caused incredible uncertainty for businesses and consumers around the world, as the tariff schedule for imports to the United States would range from 145% for China to 10% for a country like Costa Rica.
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At this time, it is unclear whether or not the protectionist measures will go into effect, much less when.
Despite this, the impact is already being felt globally.
Under the Microscope
Regarding fiscal policy, researchers warn of a downward trend in total central government revenue.
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This is because it has gone from representing 2.5% of GDP in 2023 to 2.3% in 2025, in addition to a progressive reduction in public spending, with debt interest accounting for a significant proportion of expenditures.
Regarding monetary policy, Cinpe highlighted that inflation, as of January of this year, stood at 1.21%, which keeps this indicator outside the target range established by the Central Bank of Costa Rica (between 2% and 4%).
The Monetary Policy Rate (MPR) and the Basic Passive Rate (BPR) have followed a moderate downward trend, toward more neutral levels. While the former has been hovering around 4% for several months, the latter stands at 3.98%, and this “favors greater loan availability and the revaluation of the colón, especially for consumption and investment, which reinforces the dynamism of domestic demand.”
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