Costa Rica will record its second-strongest economic growth which is reported to be 5% this year. The result will generate more private investments, and consequently, more jobs and consumption due to higher disposable income for households in Costa Rica.
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Indeed, this momentum has spread to other sectors of the economy such as commerce, tourism, and private constructions, although agriculture is still experiencing a decline in the current context.
« Production is being boosted by companies involved in the export of medical products. Similarly, there is growth in the industry, trade, services, and construction, » states Gina Carvajal, CEO of Banco Popular in Costa Rica.
The change in growth forecasts, from 4.2 to 5 percentage points, has positive effects in attracting foreign direct investments. This is also a good sign for fulfilling Costa Rica’s commitments to international organizations such as the International Monetary Fund.
« Costa Rica is becoming a magnet for attracting foreign direct investments, as well as reinvestments in the domestic market, » emphasized Daniel Souchar, a very well-known financial analyst in the country.
This year, this trend is even evident after the arrival of 28 new multinational companies, according to Cinde’s data.
These new companies or reinvestments, a result of the greater economic dynamism, will help reduce unemployment, according to Elizabeth Morales, Deputy Director of Coopecaja.
THE POSITIVE BENEFITS THE POSITIVE BENEFITS OF THE CURRENT CONTEXT
The growth rate generates encouraging prospects for households and businesses, according to experts.
The fact that the economy is growing above its potential, or natural rate, means there are more investments and business opportunities, as well as more goods and services available to consumers.
« After the pandemic, many people are rejoining the labor market, which is very positive. so we hope this indicator will continue to decrease by at least two points. Moreover, we observe greater economic activities and dynamism in the acquisition of goods and services, reinforced by obtaining consumer, mortgages, and secured loans » explained Morales.
The decrease in interest rates and greater stability in the price of the dollar also mean that people feel relief in their wallets. For 2024, it is estimated that the growth will be 3.8% after analyzing the behavior of the main economic indicators.
« This allows us to anticipate that the effects of the pandemic that affected the world in 2020 are behind us. There was a timely response in terms of monetary and fiscal policy that allowed the growth figures in 2023 to be consolidated and will continue in 2024, » says Rodrigo Cubero, former president of the Central Bank of Costa Rica.
However, it is important to note that persistent risks could affect this recovery, such as restrictive monetary policy, slower growth, or a slowdown in the global economy, rising international commodity prices, and worsening geopolitical conflicts, among other factors.
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