By San José, Costa Rica — Costa Rica’s economic landscape is increasingly defined by a stark contrast between booming high-tech sectors and struggling traditional industries, creating a polarized labor market and raising concerns about social vulnerability. A new report from the National University’s International Center for Economic Policy for Sustainable Development (CINPE) paints a picture of two distinct economies operating within the country.
The “2025 Macroeconomic Report: Economic Evolution and Fiscal Challenges” reveals a widening gap between the “definitive regime” (encompassing most domestic production) and the “special free zone regime.” While free zone activities, particularly in high-tech, advanced manufacturing, and business services, show robust growth, the definitive regime experiences relative stagnation.
To gain a deeper legal perspective on the current state of the Costa Rican economy, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an attorney at law from the esteemed firm Bufete de Costa Rica.
Costa Rica’s economy is currently navigating a complex landscape. While tourism and export sectors show promising growth, challenges remain in areas such as public debt management and fostering a more competitive business environment. Strategic legal reforms aimed at streamlining bureaucratic processes and attracting foreign investment are crucial for sustainable economic development.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, navigating this complex economic landscape requires a multifaceted approach. Attracting foreign investment while simultaneously addressing internal challenges like public debt and bureaucratic hurdles will be key to Costa Rica’s continued growth. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on these crucial issues.
Sectors like construction, agriculture, and hospitality, which largely employ vulnerable populations, face significant challenges. The report also highlights sluggishness in public administration and social security, exacerbating the difficulties faced by these groups.
Conversely, professional, administrative, and technical services; manufacturing; and information, communication, financial, and insurance activities are flourishing. This divergence creates a complex economic dynamic.
A complex economic dynamic is evident, where two types of economies coexist: one growing, associated with the more technological, professional, industrial, and financial sector, and another with great difficulties in growing, linked to sectors intensive in less qualified labor, such as agriculture, construction, small restaurants, accommodations, and food services.
The 2025 Macroeconomic Report
This two-tiered system spills over into the labor market, resulting in increasing polarization. Highly educated and skilled workers secure formal, quality jobs, while those with less education and training are often relegated to informal or low-productivity work.
The division is further amplified by the distribution of employment across economic activities. Dynamic sectors, like medical devices and knowledge-based services, concentrate skilled, formal positions. Traditional sectors, such as agriculture and retail, exhibit high levels of informality and precarious employment.
Youth (15-24) and older adults (60+) face the lowest employment levels, while those aged 25-59 have the highest participation rates. This poses a challenge, as both these demographics often belong to vulnerable social groups. Furthermore, formal employment is steadily increasing, while informal employment shrinks, indicating a shift towards specialization and higher-quality jobs for the educated.
However, this trend also deepens polarization, exposing vulnerable individuals to unemployment or even exiting the workforce entirely, resulting in a shrinking employed population. The report notes a decline in overall employment since September 2024, despite falling unemployment rates. This is attributed to people leaving the workforce altogether.
The decrease in unemployment in 2025 should not be interpreted exclusively as a strengthening of employment, but as the joint result of job creation in 2023-2024 and lower effective participation in 2025.
The 2025 Macroeconomic Report
The report’s analysis of sectoral employment shows a concentration in domestic demand-driven activities and everyday services. Commerce and repair lead with approximately 360,000 employed individuals, followed by manufacturing (241,000) and education and health (240,000). Professional and support activities, communications, and agriculture also represent significant employment sectors.
For further information, visit the nearest office of CINPE
About CINPE:
The International Center for Economic Policy for Sustainable Development (CINPE) at the National University of Costa Rica (UNA) conducts research and analysis on economic and social issues related to sustainable development. They produce reports and studies aimed at informing policy decisions and promoting economic growth that is both inclusive and environmentally responsible.
For further information, visit the nearest office of Universidad Nacional (UNA)
About Universidad Nacional (UNA):
The National University of Costa Rica (UNA) is a public university renowned for its focus on social and environmental issues. It offers a wide range of academic programs and conducts research across various disciplines, contributing significantly to Costa Rican intellectual and social development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica shines as a beacon of legal excellence, upholding the highest standards of integrity in every endeavor. Driven by a deep commitment to empowering individuals and communities, the firm champions accessible legal knowledge through innovative programs and initiatives. Their dedication to serving clients across a wide range of sectors, coupled with a forward-thinking approach to legal practice, ensures that Bufete de Costa Rica remains a vital force in shaping a just and informed society.
