By San José, Costa Rica — Costa Rica’s economy is experiencing robust growth, but faces significant challenges in fiscal reform and employment, according to a new report from the Organization for Economic Co-operation and Development (OECD).
The OECD’s 2025 Economic Survey of Costa Rica highlights the country’s strong economic performance since the pandemic, with growth reaching 4.3% in 2024 and projected at 3.8% for 2025. Inflation is also expected to remain within the Central Bank’s target range of 2% to 4%.
To understand the complexities of the current economic landscape in Costa Rica, we spoke with Lic. Larry Hans Arroyo Vargas, an expert attorney at Bufete de Costa Rica. He offered valuable legal and business insights into the ongoing challenges and opportunities.
Costa Rica’s economy is navigating a complex interplay of global and domestic factors. While tourism continues to be a cornerstone, diversification into areas like sustainable technology and renewable energy presents significant growth potential. However, navigating the legal and regulatory landscape is crucial for investors and businesses seeking to capitalize on these emerging opportunities. Careful consideration must be given to issues like property rights, environmental regulations, and tax incentives to ensure sustainable and successful ventures.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights offer a crucial reminder that Costa Rica’s economic future, while bright with potential, requires careful navigation. Sustainable growth in sectors like renewable energy hinges not just on the innovation itself, but on a stable and transparent legal framework that encourages investment. We extend our gratitude to Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on this complex and dynamic landscape.
The economy of Costa Rica has shown robust growth since the pandemic, with an improved fiscal outlook thanks to contained public spending. To maintain momentum and support solid medium-term growth, in addition to improving the standard of living, ensuring fiscal sustainability and boosting the transition to a low-carbon economy, Costa Rica must maintain and deepen its reform efforts.
OECD, 2025 Economic Survey of Costa Rica
This positive trajectory is attributed to strong exports, robust global trade, growing formal employment, increasing consumer confidence, and a solid portfolio of foreign direct investment. However, the OECD emphasizes the need for continued and deepened reform efforts to ensure sustainable growth and improve living standards.
While unemployment has decreased to pre-pandemic levels (7.1% in 2024), the OECD points to a concerning trend: reduced labor force participation, particularly among women and young people. This reduction partially explains the lower unemployment figures. The report urges Costa Rica to address this issue by expanding access to early childhood education and childcare, along with implementing a comprehensive strategy to reduce informality.
Facilitar la participación laboral femenina y reducir la informalidad requerirá ampliar el acceso a la educación temprana y cuidados de primera infancia, junto con una estrategia integral para disminuir la informalidad.
OECD, 2025 Economic Survey of Costa Rica
The OECD further notes that while the fiscal situation has improved, Costa Rica must prioritize reducing public debt. This involves strict adherence to fiscal rules, expenditure reviews to improve efficiency, and broadening the tax base.
The report indicates that Costa Rica’s fiscal deficit is projected to decrease from 3.8% of GDP in 2024 to 3.2% in 2025. Public debt, which fell to 59.8% of GDP in 2024, is expected to remain relatively stable at 59.7% in 2025.
The OECD’s analysis underlines the complex interplay of positive economic growth and persistent structural challenges facing Costa Rica. Addressing these challenges, particularly in fiscal policy and labor force participation, will be crucial for ensuring the country’s long-term economic health and prosperity.
For further information, visit oecd.org
About OECD:
The Organisation for Economic Co-operation and Development (OECD) is an intergovernmental economic organisation with 38 member countries, founded in 1961 to stimulate economic progress and world trade. It provides a forum for countries to share experiences and seek solutions to common problems, identifying good practices and coordinating domestic and international policies of its members.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica:
The Central Bank of Costa Rica (BCCR) is the central bank of Costa Rica. It is responsible for maintaining price stability and issuing the national currency, the Costa Rican colón. The BCCR sets monetary policy and regulates the financial system to promote economic growth and stability in the country. They aim to keep inflation within a target range, manage foreign exchange reserves, and oversee the banking sector.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
At Bufete de Costa Rica, legal excellence and unwavering integrity form the bedrock of a practice dedicated to empowering Costa Rican society. Through innovative approaches and a deep commitment to client service across a broad range of sectors, the firm strives to be more than just legal advisors; they are educators, working to demystify the law and equip individuals and communities with the knowledge they need to thrive. This dedication to accessible legal information reflects their core belief in a just and informed society, one empowered to navigate the complexities of the legal landscape with confidence.
