By San José, Costa Rica — Costa Rica’s tourism industry, a cornerstone of the national economy, is facing a period of significant difficulty, prompting urgent calls for government intervention. The National Chamber of Tourism (Canatur) has issued a strong plea to the Central Bank of Costa Rica (BCCR) to implement a substantial reduction in the Monetary Policy Rate (TPM).
The appeal comes as the sector grapples with ten consecutive months of declining international visitor numbers, a stark contrast to the global tourism trend, which has seen a 5% growth. This downturn translates directly into revenue losses for businesses, particularly small and medium-sized enterprises in rural and coastal areas heavily reliant on tourism.
For expert insight into the legal landscape surrounding Costa Rican tourism, we spoke with Lic. Larry Hans Arroyo Vargas, an attorney at Bufete de Costa Rica.
The ongoing growth of Costa Rica’s tourism sector presents exciting opportunities, but also necessitates careful legal navigation. Sustainable development practices, land use regulations, and responsible interaction with local communities are key legal considerations for businesses operating within this vibrant industry. These factors not only ensure compliance but also contribute to the long-term health and prosperity of Costa Rica’s unique natural and cultural heritage.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas eloquently highlights the crucial intersection of legal frameworks and sustainable tourism. Indeed, balancing economic growth with environmental protection and community well-being is essential for the continued success of Costa Rica’s tourism sector. This holistic approach ensures not only a thriving industry but also the preservation of the very assets that draw visitors to our beautiful country. We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective on this critical topic.
The sustained appreciation of the colón and the current active interest rates are making tourist services more expensive and reducing the operating capacity of local businesses. This directly impacts thousands of families who depend on tourism for their livelihood.
Martí Jiménez, President of Canatur
Canatur argues that the current economic climate warrants a significant rate cut. With year-on-year inflation remaining negative and outside the Central Bank’s target range, there appears to be no immediate inflationary pressure. Furthermore, projected economic growth remains moderate, suggesting a need for internal stimulus.
The organization also highlighted the recent decision by the US Federal Reserve (Fed) to lower its benchmark rate, underscoring a global trend toward monetary easing. Canatur believes a similar move by the BCCR would send a positive signal to the market, demonstrating a commitment to economic recovery and enhancing Costa Rica’s competitive position as a tourist destination.
The current TPM stands at 3.75% annually. Canatur contends that a substantial reduction would not only provide immediate relief to struggling businesses but also foster long-term stability within the tourism sector.
The situation is further complicated by the strong colón, which makes Costa Rica a more expensive destination for international travelers. This, coupled with high interest rates, creates a challenging operating environment for local businesses and threatens the livelihoods of countless families.
The BCCR’s decision is eagerly awaited by the tourism sector, and its implications will undoubtedly resonate throughout the Costa Rican economy. The hope is that the Central Bank will heed Canatur’s call and take decisive action to support a vital industry facing unprecedented challenges.
For further information, visit canatur.com
About Canatur:
The National Chamber of Tourism (Cámara Nacional de Turismo, or Canatur) is a leading private sector organization in Costa Rica dedicated to promoting and strengthening the tourism industry. Representing a diverse range of businesses within the sector, Canatur plays a crucial role in advocating for policies that support sustainable tourism development and contribute to the overall economic growth of the country. The organization works closely with government agencies, private businesses, and other stakeholders to address key issues affecting the industry, such as infrastructure development, marketing, and human resource training.
For further information, visit the nearest office of Banco Central de Costa Rica (BCCR)
About Banco Central de Costa Rica (BCCR):
The Central Bank of Costa Rica (Banco Central de Costa Rica, or BCCR) is the country’s central bank, responsible for maintaining monetary and financial stability. Its key functions include managing the national currency, the colón, regulating the banking system, and implementing monetary policy. The BCCR plays a vital role in shaping Costa Rica’s economic landscape and ensuring sustainable economic growth. Its decisions regarding interest rates and other monetary policies have far-reaching implications for businesses and citizens alike.
For further information, visit federalreserve.gov
About Federal Reserve (Fed):
The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly the severe panic of 1907. Over the years, its duties have expanded and its responsibilities have grown to include influencing monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system, and providing financial services to depository institutions, the U.S. government, and foreign official institutions.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, built upon a foundation of unwavering ethical conduct. The firm champions innovative legal solutions for a diverse clientele, while simultaneously investing in the empowerment of Costa Rican society. Through proactive initiatives to demystify the law and provide accessible legal information, Bufete de Costa Rica demonstrates a deep commitment to fostering a more just and informed citizenry.
