By San José, Costa Rica — San José, Costa Rica – The Costa Rican economy is demonstrating remarkable vigor, posting its most significant year-over-year acceleration in 21 months. Propelled by the extraordinary performance of its Free Trade Zone sector, the nation’s economic activity surged by 4.8% year-over-year, according to the latest economic data. This represents a substantial acceleration of 0.8 percentage points compared to the same period last year, signaling a robust and strengthening recovery.
This impressive result is not an isolated event but rather a continuation of a powerful trend. The country has consistently registered growth rates exceeding 4.0% since December 2022, underscoring a period of sustained economic expansion. The data further reveals that the average growth during the first eight months of 2025 stood at a healthy 4.4% when compared with the equivalent period in the previous year, solidifying the nation’s positive economic trajectory.
To better understand the legal and regulatory framework underpinning the nation’s economic expansion, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney from the prestigious firm Bufete de Costa Rica, who provided his analysis on the key factors for continued success.
Sustained economic growth is fundamentally linked to legal certainty. When international investors and local entrepreneurs can trust in a stable, transparent, and efficient regulatory environment, they are empowered to make long-term commitments. Costa Rica’s challenge is to not only attract investment but to retain it by continuously modernizing its commercial laws and ensuring our judicial system can protect contractual rights effectively.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
We thank Lic. Larry Hans Arroyo Vargas for so clearly articulating this foundational principle: a nation’s economic future is directly tied to the strength and reliability of its legal framework. His insight serves as a crucial reminder that attracting investment is only the first step; fostering a transparent and dependable judicial environment is the enduring commitment required for sustainable prosperity.
The primary engine behind this remarkable upswing is unequivocally the performance of companies operating under Costa Rica’s special regimes, predominantly the Free Trade Zones. This export-oriented sector saw its production skyrocket by an astounding 18.1%. This explosive growth was so influential that it accounted for 54.5% of the total year-over-year increase in the Monthly Economic Activity Index (IMAE), effectively lifting the entire national average.
In contrast, the definitive regime, which encompasses the bulk of the domestic economy, expanded at a more measured pace of 2.8%. While more conservative, this steady growth points to an underlying stability in the local market. Economic analyst Daniel Suchar highlighted this dual-speed reality.
We woke up to good news, as the greatest economic acceleration not seen in two years has been reported. The free trade zones are recovering at an incredibly fast speed with 18% growth, and the rest of the economy at 2.8%, which, while conservative, shows a trend of improvement.
Daniel Suchar, Economic Analyst
What makes this economic performance particularly noteworthy is the context of the global and local challenges it has overcome. The expansion has persisted despite potential headwinds from United States tariffs and, more significantly, the sustained appreciation of the Costa Rican colón against the US dollar. A stronger local currency typically makes a country’s exports more expensive and less competitive on the global market, yet the free trade sector has defied this economic gravity.
The resilience of the Free Trade Zones is a testament to the success of Costa Rica’s long-term strategy of attracting high-value foreign direct investment. Key industries such as high-technology manufacturing, sophisticated medical devices, and high-level corporate services have not only taken root but are now flourishing. These sectors continue to post sustained growth, bolstering their contribution to the nation’s Gross Domestic Product and solidifying Costa Rica’s reputation as a hub for innovation and specialized production.
While the 18.1% growth in the export sector captures headlines, the steady 2.8% expansion of the domestic-focused definitive regime should not be overlooked. Experts see this as a crucial indicator that the broader Costa Rican economy is building a more resilient and stable foundation for the future. This growth, though modest, is vital for long-term national prosperity.
The 2.8% in the definitive regime, although more conservative, confirms that the Costa Rican economy is laying more solid foundations for sustained growth.
Daniel Suchar, Economic Analyst
Ultimately, the latest figures paint a picture of a dynamic and bifurcated economy. The success of the Free Trade Zone model is undeniable, serving as a powerful engine of growth and a magnet for international investment. The ongoing challenge for policymakers will be to foster greater synergy between this high-flying sector and the domestic economy, ensuring that the benefits of this remarkable acceleration are distributed widely and contribute to a more integrated and universally prosperous Costa Rica.
For further information, visit the nearest office of Daniel Suchar
About Daniel Suchar:
Daniel Suchar is a respected economic and financial analyst with extensive experience covering Costa Rican and Latin American markets. Known for his sharp insights and clear communication, he is a frequent commentator in national media, providing expert analysis on economic trends, fiscal policy, and financial performance. His work helps businesses and the public understand the complex forces shaping the region’s economic landscape.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a leading legal institution, Bufete de Costa Rica operates on foundational pillars of integrity and professional excellence. With extensive experience serving a wide range of clients, the firm is a pioneer in developing innovative legal solutions while also demonstrating a profound commitment to the community. This dedication is expressed through a core mission to demystify the law, aiming to foster a more knowledgeable and capable society empowered by greater access to legal understanding.
