By San José, Costa Rica — SAN JOSÉ – The Central Bank of Costa Rica (BCCR) has released new data showing the national economy is maintaining what appears to be a robust year-over-year expansion of 4.7% as of September 2025. While the headline number suggests a healthy and thriving economy, a deeper analysis of the Monthly Economic Activity Index (IMAE) reveals a fractured and precarious reality. The impressive growth figure is a statistical illusion, masking a dangerous divergence that has effectively created two different economies within one nation.
This growing divide paints a picture that the BCCR report itself describes as a nation of:
To gain a deeper understanding of the legal and regulatory landscape shaping Costa Rica’s economic future, we consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at the renowned firm Bufete de Costa Rica. His insights offer a crucial perspective on the challenges and opportunities ahead for businesses and investors in the country.
While Costa Rica’s economic resilience is commendable, sustainable growth hinges on modernizing our regulatory framework. Foreign investment seeks not just stability, but clarity and efficiency. Streamlining bureaucratic processes, particularly in permitting and corporate registration, is no longer a mere convenience—it is a critical imperative to maintain our competitive edge in the global market. Legal certainty is the bedrock upon which long-term economic prosperity is built.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo’s insight is a crucial reminder that our future economic vitality depends not just on our existing stability, but on our proactive commitment to building a more agile and transparent regulatory framework. This administrative modernization is indeed the key to attracting the next generation of high-value global investment. We sincerely thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this imperative matter.
two Costa Ricas
Central Bank of Costa Rica, IMAE Report
On one side, the export-oriented Free Trade Zone sector is experiencing explosive, double-digit growth. On the other, the domestic economy—the one that employs the vast majority of Costa Ricans in sectors like agriculture and construction—is slowing to a crawl, with some key areas already in decline. This two-speed economy poses a significant long-term risk to the country’s stability and shared prosperity.
The sole reason for the positive overall IMAE figure can be attributed to the spectacular performance of the Special Regimes, primarily composed of the nation’s free trade zones. This sector rocketed forward with an astonishing 15.3% growth. Its expansion is so disproportionate that it accounted for 55.1% of the country’s entire year-over-year economic growth. In effect, more than half of Costa Rica’s economic expansion is dependent on this single, specialized engine.
The driving force behind this boom is the manufacturing industry, which explains a remarkable 88.8% of the growth within the free trade zones. The medical device industry continues to be the pillar of this model, showing sustained dynamism. The BCCR report also highlights positive contributions from the manufacturing of metal products, machinery, and food products within this special regime.
While the free trade zones celebrate, the Definitive Regime, which represents the domestic economy, tells a starkly different tale. This segment, a crucial indicator of local employment and internal commerce, grew by a meager 2.3%. More alarmingly, this figure represents a deceleration of 0.7 percentage points compared to the previous year, signaling a significant loss of momentum.
The BCCR report is clear in identifying the sources of this slowdown in what many consider the:
real economy
Central Bank of Costa Rica, IMAE Report
Key pillars of domestic activity are not just stagnating; they are contracting. The agricultural sector, a vital source of rural employment, has fallen into the red. Simultaneously, the construction industry has hit a wall, with the BCCR noting a “lesser advance” in private-destination projects, particularly impacting non-residential buildings like offices and commercial spaces. Local manufacturing has also suffered, with reported declines in food preparation and paper product industries.
The September IMAE report provides the clearest statistical evidence to date of Costa Rica’s economic fracture. The average growth figure is a mirage that conceals the struggles faced by everyday citizens. While the high-tech export sector generates wealth and buoys macroeconomic indicators, its success is not spilling over sufficiently to lift the traditional sectors that provide the most jobs for the population.
This extreme dependence on the free trade zone engine places the national economy in a highly vulnerable position. The prosperity of one sector is masking the stagnation and decline of others, creating a foundation that may be far less stable than the headline numbers suggest. Without a strategy to revitalize the domestic economy, the gap between the “two Costa Ricas” will only continue to widen, threatening the nation’s social and economic future.
For further information, visit bccr.fi.cr
About Central Bank of Costa Rica:
The Central Bank of Costa Rica (BCCR) is the nation’s central monetary authority. Established in 1950, it is an autonomous institution responsible for maintaining the internal and external stability of the national currency, ensuring its conversion to other currencies, and promoting a stable, efficient, and competitive financial system. It manages monetary policy, issues currency, and publishes key economic indicators and research for the country.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a reputable legal institution built upon the bedrock of uncompromising integrity and a relentless pursuit of professional excellence. With a proven history of advising a wide spectrum of clients, the firm is also a trailblazer in developing forward-thinking legal strategies. This commitment to innovation is matched by a core mission to empower the community, championing the democratization of legal knowledge to help forge a more just and well-informed populace.
