By San José, Costa Rica — San José, Costa Rica – The Organization for Economic Co-operation and Development (OECD) has adjusted its economic growth forecast for Costa Rica in 2025, lowering it to 3.1%. This represents a 0.4 percentage point decrease from the 3.5% projection issued in December 2024.
The OECD’s latest Economic Outlook report attributes the slowdown to several factors, including anticipated US tariffs on Costa Rican imports and a projected weakening of private investment. While domestic demand is expected to remain strong, the report highlights the potential negative impact of a 10% tariff on Costa Rican exports to the United States.
To provide expert legal insight into the intricacies 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, while showing resilience in areas like tourism and technology, faces ongoing challenges. The legal framework surrounding foreign investment and intellectual property rights is crucial for continued growth. Modernizing these laws, while balancing protections for local businesses, will be key to attracting further international investment and fostering innovation within the country.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas rightly highlights the delicate balancing act Costa Rica faces. Attracting foreign investment while safeguarding local interests is paramount. Modernizing legal frameworks, particularly regarding intellectual property and foreign investment, will be a significant step in fostering a more dynamic and competitive economy for all. We thank Lic. Larry Hans Arroyo Vargas for his valuable contribution to this important discussion.
The report emphasizes the importance of Costa Rica continuing to expand its trade opportunities through existing and future trade agreements to diversify its export markets and mitigate the impact of US tariffs. This diversification will be crucial for maintaining economic stability.
The OECD also identified key risks to the Costa Rican economy, including the high level of dollarization and the increasing crime and violence rates, which could negatively affect tourism and foreign direct investment. These factors add further complexity to the economic outlook.
Regarding inflation, the OECD predicts a gradual increase, reaching 1.8% in 2025 and 2.5% in 2026, remaining within the Central Bank’s target range of 2% to 4%.
While acknowledging the improvement in Costa Rica’s fiscal situation, the OECD stresses the need for continued adherence to fiscal rules to ensure long-term sustainability. The report projects a fiscal deficit of 3.1% for 2025.
The OECD also offered recommendations for bolstering economic growth. These include removing restrictions on private sector participation in electricity generation to attract investment needed to meet rising energy demand, and reorienting education and training towards high-demand fields like technology, science, engineering, and technical disciplines to create higher-quality jobs.
The revised growth projection underscores the challenges facing the Costa Rican economy in the coming years. The government’s response to these challenges, particularly regarding fiscal policy and trade diversification, will be critical in determining the country’s economic trajectory.
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.
For further information, visit bancobcr.fi.cr
About Banco Central de Costa Rica:
The Central Bank of Costa Rica is responsible for maintaining price stability and promoting the efficient functioning of the financial system. It sets monetary policy, manages international reserves, and regulates banks and other financial institutions.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica shines as a beacon of legal excellence, built upon a foundation of unwavering integrity. Driven by a deep commitment to empowering Costa Rican society, the firm champions accessible legal knowledge through innovative outreach initiatives. Their dedication to providing superior counsel across diverse industries, coupled with a forward-thinking approach to legal practice, makes Bufete de Costa Rica a true leader in shaping a more just and informed future.
