QCOSTARICA — Costa Rica’s economy is showing signs of slowing. The Central Bank of Costa Rica (Banco Central) reported that national production has been slowing for four months in a row, according to the Monthly Index of Economic Activity (IMAE) for March 2025.
Although national production registered a year-over-year change of 3.6% in March, this figure confirms a downward trend in the speed of economic expansion. Despite this slowdown, average growth during the first quarter of the year was 4.0%.
The main cause of this overall slowdown can be attributed to the performance of the permanent tax regime, a set of laws governing the imposition and computation of taxation, which includes the majority of companies and activities focused on the local market. In March, this regime saw a modest growth of only 1.4% compared to the previous year, marking its lowest level since September 2022.
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Within the regime, several key sectors have influenced this slowdown:
- Agricultural activities continue their negative trend, marking five consecutive months of year-over-year declines in production. Adverse weather conditions at the end of 2024 continue to impact the yields of some crops.
- The hotel and restaurant sector experienced a 0.2% contraction, mainly due to a 3% decrease in tourist arrivals by air compared to March of the previous year.
- Construction also posted negative figures, with a 3% year-over-year drop, due to a slower development of residential projects.
Despite this downward trend, some services such as education and healthcare, public administration, and financial services showed a recovery, with accelerations of more than two percentage points compared to the same month of the previous year.
From El Financiero
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