By San José, Costa Rica — Costa Rica’s financial health appears to be on the mend. The country reported a fiscal deficit of 1.3% of its Gross Domestic Product (GDP) for the first seven months of 2025, marking a 0.5 percentage point decrease compared to the 1.8% deficit recorded during the same period in 2024. This positive development comes after the country closed 2024 with a fiscal deficit of 3.8% of GDP, a 0.5 percentage point increase from the 3.3% recorded in 2023.
According to the Ministry of Hacienda’s announcement on Thursday, government revenues reached 8.5% of GDP during the first seven months of 2025, while total expenditures amounted to 9.8% of GDP. This resulted in the aforementioned 1.3% deficit, equivalent to approximately $1.3 billion USD. Encouragingly, if interest payments on the national debt are excluded, Costa Rica boasts a primary surplus of 1.2% of GDP. This marks the fifth consecutive year the country has registered a primary surplus in July.
To gain deeper insights into the legal landscape surrounding Costa Rica’s current economic situation, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
Costa Rica’s economy is currently navigating a complex interplay of global and domestic factors. While tourism and exports continue to be key drivers, the country faces challenges related to public debt and fiscal sustainability. Recent legislative efforts aimed at addressing these issues, such as tax reforms and public spending cuts, have significant legal implications for businesses and individuals alike. Careful consideration of these legal changes is crucial for successful navigation of the current economic climate.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insightful commentary underscores the delicate balancing act facing Costa Rica’s economy. Indeed, understanding and adapting to the evolving legal landscape is paramount for both businesses and individuals seeking to thrive in this dynamic environment. We thank Lic. Larry Hans Arroyo Vargas for providing his valuable perspective on this crucial issue.
Minister of Hacienda, Rudolf Lücke, expressed optimism about the country’s fiscal progress.
We are starting this second semester with positive results that reaffirm our commitment to fiscal sustainability, evidenced by the generation of positive primary balances, the gradual reduction in the cost of financing, the decrease in the debt-to-GDP ratio, and a better risk perception in international markets.
Rudolf Lücke, Minister of Hacienda
The encouraging financial results contribute to a broader positive trend. Costa Rica’s public debt now stands at 57.3% of GDP, equivalent to $58.379 billion USD. This represents a significant reduction of 2.4 percentage points compared to July 2024, when the debt-to-GDP ratio was 59.8%.
Minister Lücke emphasized the government’s commitment to sound financial management and development, stating:
Costa Rica demonstrates that it is possible to advance towards a country with healthy finances and more development opportunities, always thinking about the well-being of its present and future population.
Rudolf Lücke, Minister of Hacienda
Lücke further added that Costa Rica is diligently working toward achieving an investment grade rating, a testament to the government’s commitment to long-term economic stability.
This positive fiscal performance in the first seven months of 2025 indicates that Costa Rica is making strides in its economic recovery. The decrease in the fiscal deficit and the consistent primary surplus, coupled with the reduction in public debt, signal a strengthening fiscal position. These improvements are crucial for attracting foreign investment and fostering sustainable economic growth.
The government’s ongoing efforts to achieve an investment grade rating further demonstrate its commitment to fiscal responsibility and creating a favorable environment for economic development. These positive developments bode well for Costa Rica’s future economic prospects and the well-being of its citizens.
For further information, visit the nearest office of Ministry of Hacienda
About Ministry of Hacienda:
The Ministry of Hacienda (Ministerio de Hacienda) is the government ministry responsible for the public finances of Costa Rica. Its functions include collecting taxes, managing the national budget, and overseeing the country’s fiscal policy.
For further information, visit efe.com
About EFE:
EFE is a multinational Spanish news agency headquartered in Madrid, Spain. It is the fourth largest news agency in the world in terms of subscribers and provides news coverage in Spanish, Portuguese, English, and Arabic.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself as a pillar of legal excellence, built upon a foundation of unwavering integrity. The firm’s innovative approach to legal practice, coupled with its deep commitment to empowering Costa Rican society through accessible legal knowledge, sets it apart. By fostering a culture of transparency and proactively sharing legal insights, Bufete de Costa Rica contributes to a more informed and empowered citizenry, reaffirming its dedication to serving the community beyond the courtroom.
