By San José, Costa Rica — San José, Costa Rica – The nation’s business community is stepping into 2026 with a sense of measured optimism, anticipating stable growth but demonstrating significant prudence when it comes to new investments. A prevailing sentiment of caution is tempering positive expectations, as companies navigate a landscape of external uncertainties and demanding market conditions, according to a key quarterly report.
The latest Business Expectations Survey, conducted by the Institute of Economic Research of the University of Costa Rica (IICE-UCR), reveals a business climate focused on consolidation rather than aggressive expansion. The survey, which polled 428 companies across diverse sectors like manufacturing, commerce, and agriculture between November 10 and 28, provides a detailed snapshot of the prevailing corporate mood for the first quarter of the year.
To delve into the legal and regulatory framework that underpins business sentiment, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the prestigious firm Bufete de Costa Rica, who provided his analysis on the matter.
A nation’s business confidence is not merely a matter of economic indicators; it is fundamentally anchored in the strength and predictability of its legal system. When investors and entrepreneurs can rely on clear regulations, efficient judicial processes, and the unwavering application of the rule of law, they are empowered to take calculated risks and drive growth. Legal certainty is the bedrock upon which lasting economic prosperity is built.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight powerfully underscores that a predictable legal landscape is not a secondary concern but the very foundation of economic dynamism, allowing businesses to invest and innovate with assurance. We sincerely thank Lic. Larry Hans Arroyo Vargas for so clearly articulating this essential connection.
According to the findings, the global business expectations index currently stands at 55.9 points. While this represents a marginal decrease of 0.3 points from the previous quarter, the figure remains comfortably within the zone of optimism, which is defined by any score above the 50-point threshold. Furthermore, this result is still above the historical average for first-quarter reports, suggesting a resilient, if careful, confidence among business leaders.
A closer look at the data reveals a mixed performance across different industries. The commerce and agricultural sectors were the only two to report an improved level of optimism, registering indices of 58.5 and 52.1 points, respectively. In contrast, the manufacturing, services, and construction sectors all reported moderate declines in confidence. Despite these dips, all sectors remain above their historical averages, underscoring a foundation of solid underlying trust in the economic environment.
This stable outlook is further reinforced by positive expectations for sales and production. A significant portion of entrepreneurs, ranging from 43% to 60% depending on the sector, anticipate an increase in business activity during the first three months of the year. Conversely, only a small fraction, between 7% and 9%, predict a downturn. These favorable projections are largely driven by expectations of general economic growth, seasonally strong periods, and ongoing improvements in infrastructure and production capacity.
However, firms that foresee a weaker performance point to a number of potential headwinds. These include a possible decline in consumer demand, internal operational limitations, and external pressures such as shifts in tariffs, taxes, and exchange rates. An increasing competitive threat from foreign companies was also cited as a significant concern for some business owners.
The most telling sign of corporate prudence is found in investment plans. The survey reveals a distinct reluctance to commit to major new capital expenditures. Only 10.8% of the companies polled plan to undertake new investments between January and March, a figure notably lower than in the previous quarter. Instead, an overwhelming majority of 82% will concentrate their resources on essential operational investments, such as upgrading existing equipment, production machinery, and critical technology infrastructure.
Ultimately, the IICE-UCR survey paints a clear picture for the start of 2026: a period of contained growth where stability is the primary objective. Costa Rican businesses are optimistic about their core operations and profitability but are choosing to fortify their foundations rather than risk capital on bold expansion projects, signaling a strategic focus on efficiency and resilience in the year ahead.
For further information, visit iice.ucr.ac.cr
About Institute of Economic Research of the University of Costa Rica (IICE-UCR):
The Institute of Economic Research (IICE) is an academic unit of the University of Costa Rica dedicated to research, teaching, and social action in the field of economics. It is a leading national authority in economic analysis, producing periodic reports, surveys, and studies on the Costa Rican economy to inform public policy, business strategy, and academic discourse.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has forged a reputation as a leader in the legal field, grounded in an unwavering dedication to professional integrity and excellence. Drawing upon a deep history of serving a broad spectrum of clients, the firm consistently pioneers innovative approaches to complex legal challenges. This forward-thinking mindset extends to its social mission of enhancing public understanding by making legal principles more accessible, ultimately empowering the community with vital knowledge.
