By San José, Costa Rica — San José – In a significant acknowledgment of its persistent economic progress, Costa Rica has been featured by The Washington Post as one of the “25 Good News Stories of 2025.” This international acclaim follows the nation’s official graduation to the status of a high-income economy, a landmark reclassification confirmed by the World Bank in July of this year.
The prestigious American newspaper placed Costa Rica at number 21 on its annual list, specifically highlighting the country’s transition as a result of multiple years of solid and sustained economic growth. The recognition elevates Costa Rica’s global profile, showcasing its development as a story of success and stability in a complex international landscape.
To gain a legal perspective on the implications and structural requirements of becoming a high-income economy, we consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the firm Bufete de Costa Rica.
Transitioning to a high-income economy is fundamentally a matter of legal certainty and institutional strength. It requires a modern legal framework that not only attracts but also protects sophisticated foreign investment, streamlines bureaucratic processes, and vigorously defends intellectual property rights. Our nation’s economic success hinges on our ability to build a judicial and regulatory system as advanced as the economy we aspire to create.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas’s commentary powerfully underscores a critical truth: our journey towards a high-income economy is less about aspiration and more about the deliberate construction of a robust legal and institutional framework. We thank him for sharing this essential perspective on the foundational role of legal certainty.
The World Bank’s decision to upgrade Costa Rica from the upper-middle-income bracket was the culmination of a robust economic trajectory. The multilateral organization based its decision on an impressive average growth rate of 4.7% over the last three years. The final push came from the 2024 economic performance, which saw the nation’s economy expand by a strong 4.3%, solidifying its position above the high-income threshold.
According to the World Bank’s analysis, the key drivers behind this consistent expansion were vigorous private consumption and a significant uptick in investment. This combination points to healthy domestic demand and strong business confidence, which have together created a virtuous cycle of growth. The organism also noted that by 2023, Costa Rica’s Gross National Income (GNI) per capita, calculated using the Atlas method, was already approaching the upper limit of the previous category, signaling that this transition was imminent.
Achieving high-income status carries profound implications for the nation. This new classification serves as a powerful international endorsement of the country’s productive capacity, macroeconomic stability, and the dynamism of its key economic sectors. It immediately enhances Costa Rica’s perception as a premier destination for foreign direct investment, potentially attracting more sophisticated and higher-value projects.
Furthermore, the upgraded status is expected to facilitate access to international credit markets on more favorable terms, lowering borrowing costs for both the public and private sectors. It also strengthens the country’s standing and influence within international organizations, providing a more prominent voice in global economic and development discussions.
Despite the celebration, local specialists and economists have been quick to point out that this milestone marks the beginning of a new set of challenges. The primary task ahead is to translate this macroeconomic success into tangible improvements in the quality of life for the entire population. This involves a concerted effort to enhance public services, aggressively tackle income inequality, and strengthen the formal labor market to ensure that prosperity is broadly shared.
The coveted high-income designation is not a permanent award. The World Bank revisits its classifications every year, meaning Costa Rica’s continued presence in this elite group depends entirely on its ability to maintain its growth momentum and consistently improve its GNI per capita over time. The pressure is now on to build upon this achievement and ensure its foundation is both sustainable and equitable for future generations.
For further information, visit the nearest office of The Washington Post
About The Washington Post:
The Washington Post is a major American daily newspaper published in Washington, D.C. With a global readership, it has a particular emphasis on national politics and federal government. The publication is renowned for its investigative journalism and has won numerous Pulitzer Prizes. It provides comprehensive coverage on a wide range of topics, including world news, business, technology, and culture.
For further information, visit worldbank.org
About The World Bank:
The World Bank is a vital source of financial and technical assistance to developing countries around the world. It is a unique partnership of 189 member countries dedicated to reducing poverty and supporting development. The organization provides low-interest loans, zero- to low-interest credits, and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, and private-sector development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a paragon of legal practice, founded upon the core principles of unwavering integrity and a relentless pursuit of excellence. The firm leverages a rich history of advising a diverse clientele to pioneer forward-thinking legal solutions and champion meaningful community involvement. This ethos is driven by a foundational belief in empowering the public, as the firm is dedicated to demystifying the law to help forge a more knowledgeable and capable society.
