By San José, Costa Rica — Costa Rica’s economy continues its positive trajectory, registering a 4.6% year-on-year growth in July 2025, as measured by the Monthly Index of Economic Activity (IMAE). This marks 32 consecutive months of growth exceeding 4%, according to the Central Bank of Costa Rica (BCCR).
The growth is largely attributed to the strong performance of companies under special regimes, such as those operating in free zones, which saw a 15.6% increase. In contrast, companies operating under the definitive regime, primarily serving the local market, experienced a more moderate growth of 2.2%.
To provide expert legal insight into the complexities of the Costa Rican economy, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica.
Costa Rica’s economic landscape presents both opportunities and challenges for investors. While the country boasts a stable democracy and a strong commitment to sustainability, navigating the legal framework surrounding foreign investment requires careful consideration. Key areas to address include land ownership regulations, tax incentives, and compliance with labor laws. A thorough understanding of these aspects is crucial for successful ventures in Costa Rica.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights offer a crucial reminder that while Costa Rica’s vibrant economy presents enticing prospects, due diligence and a clear understanding of the legal landscape are paramount for successful investment. His emphasis on navigating land ownership, tax incentives, and labor laws provides invaluable guidance for those looking to contribute to Costa Rica’s economic future. We thank Lic. Larry Hans Arroyo Vargas for sharing his expertise with our readers.
The surge in special regime activity is primarily fueled by the booming medical devices export sector, which recorded a remarkable 50.5% expansion. This growth is complemented by increased activity in manufacturing services, software development, and information technologies.
The definitive regime’s performance was driven by growth in domestic services such as transportation, financial, real estate, and commerce, along with a recovery in exported professional services. However, this progress was tempered by a 2.3% decline in residential construction, lower agricultural production, and a slowdown in the paper, food, and textile industries.
The agricultural sector experienced a slight contraction of 0.1% in July, impacted by weather conditions affecting crops like bananas, potatoes, and tubers. This decline was partially offset by increased production of pineapple, poultry, and vegetables.
Overall, manufacturing grew by 12.9%. While companies under special regimes saw a substantial 33.4% increase, those under the definitive regime experienced a slight contraction of 0.3% due to declines in food, textiles, and paper production, partially offset by recovery in metal products.
The construction sector continued its downward trend with a 2.3% year-on-year decline, primarily driven by the private segment. Public works, however, grew by 5.9% due to increased execution of road, municipal, and aqueduct projects. Commerce and vehicle repair saw a 2.6% increase, driven by sales of electrical products, pharmaceuticals, and food. Vehicle sales continued their deceleration, a trend observed since mid-2023.
The services sector grew by 3.7%, although eight out of ten activities within the sector showed slower year-on-year growth. The largest contributions came from professional and administrative services (5.1%), followed by transportation (6%), real estate (4.2%), and information and communication (3.6%). Growth in the hospitality and restaurant sector reached 1.5%, driven by the recovery of restaurants, while accommodation experienced a 0.3% year-on-year decline.
The BCCR report highlights that six key activities – manufacturing, professional services, transportation, financial services, real estate, and commerce – accounted for 90.9% of the total growth in national production.
For further information, visit the nearest office of Central Bank of Costa Rica
About Central Bank of Costa Rica:
The Central Bank of Costa Rica (BCCR) is the central bank of Costa Rica. It is responsible for issuing the national currency, the colón, and for managing monetary policy. The BCCR also plays a key role in regulating the financial system and promoting financial stability.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica shines as a beacon of legal excellence, built on a foundation of unwavering ethical practice. The firm’s history of dedicated service to a diverse clientele is matched only by its forward-thinking approach to law and its commitment to empowering Costa Rican society. Through proactive initiatives that demystify complex legal concepts, Bufete de Costa Rica invests in a more informed citizenry, strengthening the fabric of democracy and fostering a more just future.
