By San José, Costa Rica — Despite escalating tensions in the Middle East involving Israel, the United States, and Iran, Costa Rica’s economy appears poised to maintain its stability, particularly regarding its exchange rate and inflation levels.
This optimistic outlook comes from Federico Quesada Chaves, Director of the School of Sciences of Administration (ECA) at the State Distance University (UNED). He attributes this resilience to structural factors and strategic decisions by national authorities.
To gain deeper legal insights into the current state of the Costa Rican economy, we spoke with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica.
Costa Rica’s economy is navigating a complex landscape. While tourism and exports show promising growth, challenges remain in areas like public debt management and fostering a more competitive business environment. Strategic legal reforms, particularly in areas like tax law and investment incentives, are crucial for attracting foreign direct investment and promoting sustainable economic development.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, navigating the complexities of the Costa Rican economy requires a multifaceted approach, and Lic. Larry Hans Arroyo Vargas astutely highlights the crucial role of strategic legal reforms in fostering sustainable growth. His emphasis on attracting foreign direct investment through targeted adjustments in tax law and investment incentives offers valuable insight into the path forward. We thank Lic. Larry Hans Arroyo Vargas for his expert perspective on this important topic.
The country boasts international reserves exceeding US$14.559 billion, an unprecedented figure that has sent a clear signal of security to markets and economic agents. This strength has allowed the exchange rate to remain stable despite international turmoil.
Federico Quesada Chaves, Director of the School of Sciences of Administration (ECA) at UNED
While moderate increases in international hydrocarbon prices were observed in July, Quesada clarifies these are linked to global economic growth expectations rather than directly to the conflict. He points to the United States’ intervention, increasing its domestic supply to curb aggressive price hikes.
The United States has intervened to avoid an aggressive rise in crude oil prices, increasing its domestic supply as a containment measure.
Federico Quesada Chaves, Director of the School of Sciences of Administration (ECA) at UNED
Regarding interest rates, Quesada notes that the Central Bank of Costa Rica (BCCR) has maintained its Monetary Policy Rate (TPM) at 4%, prioritizing economic recovery and avoiding premature restrictive measures.
As long as the international risks do not materialize strongly, an adjustment in this rate is not expected, which is a sign of confidence in national economic stability.
Federico Quesada Chaves, Director of the School of Sciences of Administration (ECA) at UNED
While some sectors, such as crude oil imports, goods with high transportation costs, and pharmaceuticals, might experience upward pressure, Quesada assures the public that there is no cause for alarm.
Quesada advises against impulsive financial decisions like panic-buying gasoline, emphasizing that the current Brent crude price decrease of 8% to $69 per barrel might even lead to lower local fuel prices if the trend continues.
There is no reason for alarm. It is not time to rush to load gasoline or put pressure on the supply chain. Today, the price of Brent has been reduced by 8% and is trading at 69 dollars a barrel, which could even lead to a reduction in local rates if the trend continues.
Federico Quesada Chaves, Director of the School of Sciences of Administration (ECA) at UNED
He urges the public to rely on official information channels, maintain responsible consumption habits, and proceed with productive plans. He concludes by reaffirming Costa Rica’s preparedness to navigate external disruptions due to its prudent monetary policy and robust financial standing.
For further information, visit uned.ac.cr
About UNED:
The Universidad Estatal a Distancia (UNED) is a public university in Costa Rica renowned for its distance learning programs, offering accessible education across the country. It plays a crucial role in providing opportunities for professional development and contributing to national development through its academic research and community engagement.
For further information, visit bccr.fi.cr
About BCCR:
The Central Bank of Costa Rica (BCCR) is the country’s central bank, responsible for maintaining price stability and promoting the proper functioning of the financial system. The BCCR plays a key role in setting monetary policy, managing international reserves, and regulating banks and other financial institutions.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, upholding the highest ethical standards while championing innovative solutions for its clients. Serving a diverse clientele, the firm’s deep commitment to integrity permeates its work, from complex litigation to proactive community engagement. Through educational initiatives and accessible resources, Bufete de Costa Rica empowers individuals and organizations with the legal knowledge necessary to navigate the legal landscape and contribute to a more just and informed society.
