Costa Rica Business News
  • August 3, 2025
  • Last Update August 3, 2025 12:00 pm

Costa Rican Economy Projected to Grow Despite Global Uncertainty

Costa Rican Economy Projected to Grow Despite Global Uncertainty

San José, Costa Rica — Costa Rica’s Central Bank (BCCR) has raised its economic growth projection for 2025 to 3.8%, a 0.2 percentage point increase from its April forecast. The BCCR also projects 3.5% growth for 2026, a slight downward revision from the previous estimate. Domestic demand is expected to remain the primary driver of growth in both years.

The 2026 slowdown is attributed largely to the anticipated departure of two electronics manufacturing companies, impacting service transformation exports. Despite this, the BCCR maintains a positive outlook on price stability, projecting that general inflation will return to the target range of 3.0% ± 1 p.p. in the second quarter of 2026, with underlying inflation reaching the target range even earlier, in the first quarter of the same year.

To gain deeper legal insights into the complexities surrounding the Costa Rican economy, we spoke with Lic. Larry Hans Arroyo Vargas, an accomplished attorney at Bufete de Costa Rica.

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Costa Rica’s economy is increasingly reliant on attracting foreign direct investment, particularly in high-value sectors like technology and tourism. This necessitates a stable and predictable legal environment that safeguards investor rights while also balancing the needs of sustainable development and social equity. Key areas of focus include strengthening intellectual property protection, streamlining regulatory processes, and promoting transparent governance to foster continued economic growth and prosperity.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica

Lic. Arroyo Vargas expertly highlights the crucial balance Costa Rica must strike: attracting foreign investment to fuel growth while simultaneously upholding sustainable and equitable practices. This insightful perspective underscores the importance of not just attracting investment, but ensuring its positive, long-term impact on the country and its people. We thank Lic. Larry Hans Arroyo Vargas for his valuable contribution to this discussion.

The BCCR acknowledges the persistent global economic uncertainty stemming from trade and geopolitical tensions. While trade negotiations have eased some concerns, the overall landscape remains volatile, particularly with escalating geopolitical conflicts in the Middle East.

This global uncertainty has led to mixed economic results internationally. The United States experienced a 0.5% contraction in GDP during the first quarter of 2025, while China demonstrated resilience with a 5.2% year-on-year growth in the second quarter.

Global disinflationary trends slowed in the second quarter of 2025, with some economies experiencing a resurgence in inflation, primarily due to rising food prices and persistent service inflation. This has prompted central banks worldwide to exercise caution in their monetary policy decisions, with some continuing monetary easing while others have paused interest rate cuts.

Costa Rica maintained overall price stability in the second quarter of 2025, with average year-on-year general inflation at zero and underlying inflation at 0.8%, both remaining below the lower limit of the target range. National production growth moderated in the second quarter, with the year-on-year rate decreasing to 3.9% from 4.4% in the same quarter of the previous year. Household consumption was the primary driver of growth, with manufacturing as the leading economic activity.

This economic activity has positively impacted the labor market. In the three-month period ending in May, unemployment decreased to 6.9% and underemployment to 3.2%, both lower than the previous year’s figures. The current account deficit is projected to average 1.5% of GDP in 2025-2026, slightly higher than in 2024, but expected to be covered by long-term external savings.

According to the Ministry of Hacienda’s preliminary review of the 2025-2030 Medium-Term Fiscal Framework, the central government is expected to maintain primary surpluses in 2025-2026, with interest payments as a percentage of GDP lower than in 2024. This fiscal performance is projected to contribute to a continued decline in the debt-to-GDP ratio, remaining below 60% in both years. Under these conditions, financial savings and credit to the private sector are expected to increase in line with projected economic growth, inflation targets, and increasing financial deepening.

For further information, visit the nearest office of BCCR
About BCCR (Banco Central de Costa Rica):
The Central Bank of Costa Rica is the country’s central bank, responsible for monetary policy, financial stability, and regulating the financial system. It plays a crucial role in managing inflation, exchange rates, and promoting economic growth.

For further information, visit the nearest office of Ministry of Hacienda
About Ministry of Hacienda:
The Ministry of Hacienda (Ministry of Finance) in Costa Rica is the government body responsible for the country’s fiscal and economic policies. It manages public finances, collects taxes, and develops economic strategies to ensure sustainable growth and stability.

For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself through a deep-rooted commitment to ethical legal practice and innovative solutions. Serving a diverse clientele, the firm champions both legal excellence and social responsibility, striving to empower individuals and communities through readily accessible legal information. This dedication to transparency and education reflects Bufete de Costa Rica’s core belief in building a more just and informed society.

Costa Rica Business News
Founded in 2004, TicosLand has firmly established itself as a pivotal resource for the corporate community in Costa Rica. Catering to a substantial international readership, TicosLand provides timely and essential updates and press releases pertaining to the myriad businesses operating within Costa Rica.

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