Costa Rica

ECONOMICS

Since 2010, Costa Rica has enjoyed strong and stable economic growth - 3.8% in 2017. Exports of bananas, coffee, sugar, and beef are the backbone of its commodity exports. Various industrial and processed agricultural products have broadened exports in recent years, as have high value-added goods, including medical devices. Costa Rica's impressive biodiversity also makes it a key destination for ecotourism.

Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the incentives offered in the free-trade zones; Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR), which became effective for Costa Rica in 2009, helped increase foreign direct investment in key sectors of the economy, including insurance and telecommunication. However, poor infrastructure, high energy costs, a complex bureaucracy, weak investor protection, and uncertainty of contract enforcement impede greater investment.

Costa Rica’s economy also faces challenges due to a rising fiscal deficit, rising public debt, and relatively low levels of domestic revenue. Poverty has remained around 20-25% for nearly 20 years, and the government’s strong social safety net has eroded due to increased constraints on its expenditures. Costa Rica’s credit rating was downgraded from stable to negative in 2015 and again in 2017, upping pressure on lending rates - which could hurt small business, on the budget deficit - which could hurt infrastructure development, and on the rate of return on investment - which could soften foreign direct investment (FDI). Unlike the rest of Central America, Costa Rica is not highly dependent on remittances - which represented just 1 % of GDP in 2016, but instead relies on FDI - which accounted for 5.1% of GDP.

 

1990 2000 2010 2018
GNI, Atlas method (current US$) (billions) 2.18 1.77 11.77 9.33
GNI per capita, Atlas method (current US$) 930 560 2,750 1,780
GNI, PPP (current international $) (billions) 6.92 8.46 21.25 17.85
GNI per capita, PPP (current international $) 2,940 2,710 4,970 3,400
GDP (current US$) (billions) 2.8 3.22 13.15 13.52
GDP growth (annual %) 1 7.6 9.9 -6.2
Inflation, GDP deflator (annual %) -1 47 29.4 23.1
Agriculture, forestry, and fishing, value added (% of GDP) 13 5 4 7
Industry (including construction), value added (% of GDP) 41 72 66 51
Exports of goods and services (% of GDP) 52 80 69 72
Imports of goods and services (% of GDP) 19 44 56 50
Gross capital formation (% of GDP) 16 23 47 23
Revenue, excluding grants (% of GDP) .. 30.6 34.6 25.8
Net lending (+) / net borrowing (-) (% of GDP) .. -0.8 36.4 5.4
States and markets
Time required to start a business (days) .. 38 159 50
Domestic credit provided by financial sector (% of GDP) .. .. .. ..
Tax revenue (% of GDP) .. 9.1 6.9 7.8
Military expenditure (% of GDP) 4.3 1.9 1.8 2.6
Mobile cellular subscriptions (per 100 people) 0 2.2 87 95.3
Individuals using the Internet (% of population) 0 0 5 8.7
High-technology exports (% of manufactured exports) .. .. .. 3
Statistical Capacity score (Overall average) .. .. 54 49
Global links
Merchandise trade (% of GDP) 57 92 102 85
Net barter terms of trade index (2000 = 100) 63 100 174 215
External debt stocks, total (DOD, current US$) (millions) 4,916 4,676 2,789 4,314
Total debt service (% of exports of goods, services and primary income) 34.6 1.7 1.6 6.5
Net migration (thousands) 23 51 -60 -20
Personal remittances, received (current US$) (millions) 4 10 33 0
Foreign direct investment, net inflows (BoP, current US$) (millions) 23 -98 1,521 4,315
Net official development assistance received (current US$) (millions) 217.2 32.2 1,315.10 146.6