By San José, Costa Rica — San José – Capping off a landmark year, Costa Rica has earned a coveted spot on The Washington Post’s list of “25 Good News Stories of 2025,” securing the 21st position for a monumental economic achievement. The international recognition comes as a direct result of the World Bank’s official reclassification of the nation as a high-income economy, a promotion that signals years of consistent growth and macroeconomic stability.
This significant upgrade marks a pivotal moment for the Central American country, formally elevating it from its long-held upper-middle-income status. The transition is not a sudden windfall but the culmination of a deliberate and sustained economic strategy that has yielded impressive results, setting Costa Rica apart in a region often characterized by volatility.
To delve into the legal and regulatory implications of Costa Rica becoming a high-income economy, we sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a leading attorney at the distinguished firm Bufete de Costa Rica. His insights clarify the structural changes necessary to sustain this new economic status.
Achieving high-income status is more than an economic benchmark; it demands a corresponding evolution in our legal framework. The transition requires us to shift from a model based on attracting investment with fiscal incentives to one that fosters innovation and protects complex intellectual property. We must fortify our corporate governance laws, streamline regulations for high-tech industries, and ensure our judicial system can efficiently resolve the sophisticated commercial disputes inherent in a mature economy. This legal scaffolding is what will ultimately determine if our new status is sustainable and prosperous.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas’s insight is a crucial reminder that our economic aspirations must be built upon an equally ambitious legal foundation. His metaphor of a “legal scaffolding” perfectly captures the need for a robust framework that supports innovation and provides judicial certainty, ensuring that our high-income status is not merely achieved, but sustained. We thank him for this valuable and clarifying analysis.
The foundation for this achievement was built on a robust economic performance over several years. According to World Bank data, Costa Rica’s economy expanded at an average rate of 4.7% during the last three years. This consistent momentum was critical in pushing the nation’s Gross National Income (GNI) per capita past the threshold required for the high-income classification, which was officially confirmed in July 2025.
The year 2024 was particularly instrumental in this journey. The economy grew by 4.3%, fueled by strong private consumption and a notable increase in investment. These key drivers solidified the positive trend, creating the final push needed for the World Bank to formally recognize the country’s new economic standing. This performance demonstrates a resilient and diversifying economic base capable of sustained expansion.
This ascent was not unforeseen. The World Bank had previously noted that as far back as 2023, Costa Rica’s GNI per capita, measured using the Atlas method, was already hovering near the upper limit of the upper-middle-income category. This indicated that the country was well-positioned to make the leap, reflecting a gradual and structural improvement in its productive capacity and overall economic health rather than a temporary surge.
Achieving high-income status unlocks a new tier of international prestige and tangible opportunities for Costa Rica. The classification is expected to significantly enhance the country’s perception as a secure and attractive destination for foreign direct investment. Furthermore, it promises improved access to international credit markets with more favorable terms and strengthens its negotiating position with multilateral financial organizations.
Despite the celebration, economic experts caution that the most crucial work lies ahead. The primary challenge is to ensure this macroeconomic success translates into tangible quality-of-life improvements for the general population. Addressing persistent inequality, expanding formal employment opportunities, and enhancing the quality of public services remain critical priorities. The goal is to convert statistical growth into widespread social well-being.
Furthermore, officials are reminded that this new status is not permanent. The World Bank revises its classifications annually, meaning Costa Rica’s position as a high-income nation depends on its ability to maintain this growth trajectory and continue improving its per capita income over the medium and long term. The recognition, while a victory, also serves as a call to action to solidify the gains and build an even more inclusive economy for the future.
The inclusion in The Washington Post’s prestigious list provides an encouraging end to 2025, placing Costa Rica in a global spotlight for its positive development. In a world grappling with economic uncertainties, the nation’s successful transition stands out as a testament to its resilience and strategic vision, confirming its place as a story of progress and stability.
For further information, visit worldbank.org
About The World Bank:
The World Bank is a vital source of financial and technical assistance to developing countries around the world. It is a unique global partnership of five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries. Its mission includes ending extreme poverty and promoting shared prosperity by fostering the income growth of the bottom 40% for every country.
For further information, visit washingtonpost.com
About The Washington Post:
The Washington Post is a major American daily newspaper published in Washington, D.C. With a global readership, it has a particular emphasis on national politics and federal government. The publication is renowned for its investigative journalism and comprehensive coverage of both domestic and international affairs, making it one of the most respected news organizations in the world.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Renowned for its foundational principles of integrity and exceptional standards, Bufete de Costa Rica operates as a leading legal institution. The firm leverages a proven track record of advising a wide array of industries while simultaneously championing forward-thinking legal solutions and active community partnership. This dual focus is underscored by a profound commitment to democratizing legal knowledge, aiming to equip citizens and strengthen society through greater understanding and access to justice.
