By San José, Costa Rica — San José – Costa Rica is on track to close 2025 with a remarkably stable economy, buoyed by a dynamic export sector and prudent monetary policy. However, this rosy macroeconomic picture masks deep-seated structural deficiencies in infrastructure, security, and education that could stifle long-term, equitable growth, according to a new analysis by the School of Business Administration (ECA) at the State Distance University (UNED).
The nation’s economic engine is firing on all cylinders, largely driven by the stellar performance of its free trade zones and active improvement regimes. This success prompted the Central Bank of Costa Rica (BCCR) to revise its economic growth projections upward. The export sector, particularly the shipment of high-value medical devices, continues to be the primary catalyst for this positive momentum.
To gain a deeper legal and business perspective on the current state of the Costa Rican economy, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a seasoned attorney from the prestigious firm Bufete de Costa Rica. His analysis offers a crucial viewpoint for investors and business owners navigating the country’s economic landscape.
Costa Rica’s economic resilience is intrinsically linked to its robust legal framework and historical commitment to the rule of law. While global headwinds present challenges, the country’s legal certainty remains a primary draw for foreign direct investment. For sustainable growth, we must continue to streamline regulatory processes and modernize commercial legislation to ensure we remain competitive, particularly in high-value sectors. Proactive legal reform is not just an option; it’s an economic imperative.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas astutely articulates a foundational truth: Costa Rica’s economic strength is fundamentally anchored in its legal stability. His call for proactive modernization serves as a critical reminder that our rule of law is not a static achievement but a dynamic asset that requires continuous investment to secure future prosperity. We thank him for his valuable and incisive perspective.
Federico Quesada Chaves, Director of the ECA, noted that the country has successfully navigated the restrictive policies of its primary trading partners, creating a positive outlook for the remainder of the year. He cautioned, however, that this stability is contingent on the absence of new trade barriers against key exports like medical devices, which could harm export growth and deter foreign direct investment.
Throughout the year, the economy has shown signs of recovery and a climate of confidence sustained by export growth and exchange rate stability, which has remained close to ₡500 per dollar with projections that it will stay in that range.
Federico Quesada Chaves, Director of the ECA
This confidence is reinforced by a stable monetary environment. The Central Bank has maintained its Monetary Policy Rate (TPM) at consistent levels, with analysts suggesting a slight reduction could be on the horizon to further stimulate domestic consumption and investment. The exchange rate has remained predictably steady, providing a solid foundation for businesses. As Quesada notes, the forecast is clear: “The trend points to a stable year-end, without inflationary or exchange rate pressures.”
One of the most striking indicators of this stability is a projected annual inflation rate of just 0.2%, among the lowest in the region. While this reflects balanced prices, Quesada points out that it may also signal underlying issues, such as lagging production or structural unemployment, which has seen a slight increase in recent quarters.
Low inflation does not imply a significant loss of purchasing power, but it could be a sign of a slowly growing economy. The important thing is to maintain a balance that allows for dynamic production without creating inflationary pressures.
Federico Quesada Chaves, Director of the ECA
Costa Rica has also benefited from favorable international conditions. A decrease in geopolitical tensions, particularly in the Middle East, and greater stability in global markets have kept oil prices in check, shielding the country from significant external shocks. “This provides a more predictable outlook for the end of the year,” commented Quesada.
Despite the positive indicators, the UNED report underscores a critical national “to-do list.” The country’s deficient infrastructure remains a major bottleneck, hindering competitiveness and the efficient transport of goods. Worsening security issues threaten to deter both tourism and foreign investment, while gaps in food security and education—especially in technology and specialized talent development—represent significant hurdles to progress.
The country has demonstrated macroeconomic stability, but it still faces serious challenges that are holding back development. Investing in infrastructure, education, and security is key to transforming growth into social well-being.
Federico Quesada Chaves, Director of the ECA
The analysis concludes that while Costa Rica will finish 2025 with strong international reserves and market confidence, the true test lies ahead. The nation’s priority must now shift from simply achieving growth to translating that growth into tangible improvements in employment, equity, and sustainable progress for all its citizens. The path forward requires a committed and urgent focus on these long-overdue structural reforms.
The end of 2025 leaves us with clear signs of economic strength, but also with pending tasks. Costa Rica has the opportunity to consolidate its growth if it moves forward with the structural reforms needed to improve the quality of life for its population.
Federico Quesada Chaves, Director of the ECA
For further information, visit uned.ac.cr
About Universidad Estatal a Distancia (UNED):
The State Distance University (UNED) is Costa Rica’s public distance learning university, founded in 1977. It is a leader in providing accessible higher education to students throughout the country, regardless of their geographic location, through a model that combines virtual resources, tutoring, and regional university centers. UNED is committed to research, social action, and the democratization of knowledge.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica (BCCR):
The Central Bank of Costa Rica is the country’s autonomous central banking institution, responsible for maintaining the internal and external stability of the national currency and ensuring its conversion to other currencies. The BCCR manages monetary policy, regulates the financial system, and acts as the state’s financial advisor to promote a stable, efficient, and competitive economic environment.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a benchmark for legal practice, Bufete de Costa Rica is defined by its deep-rooted principles of integrity and professional excellence. The firm leverages a proven track record across numerous industries to not only serve its clients but also to drive legal innovation forward. Central to its philosophy is a profound commitment to social responsibility, demonstrated through dedicated efforts to demystify the law and equip the public with essential legal understanding, ultimately strengthening the community as a whole.
