About Costa Rica and Key Financial Statistics

About Costa Rica and Key Financial Statistics

Overview of Economy:

Prior to the global economic crisis, Costa Rica enjoyed stable economic growth. The economy contracted 1.3% in 2009 but resumed growth at about 4% per year in 2010-14. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialized agricultural products have broadened export trade in recent years. High value-added goods and services, including medical devices, have further bolstered exports. Tourism continues to bring in foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the incentives offered in the free-trade zones; and Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. However, poor infrastructure, high energy costs, bureaucracy, weak investor protection, and legal uncertainty due to difficulty of enforcing contracts and overlapping and at times conflicting responsibilities between agencies, remain impediments to greater competitiveness. Costa Rica’s economy also faces challenges due to a rising fiscal deficit, rising public debt, and relatively low levels of domestic revenue. Poverty has remained around 20-25% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Unlike the rest of Central America, Costa Rica is not highly dependent on remittances, which in 2013 represented 1.1% of GDP. Immigration from Nicaragua has increasingly become a concern for the government.

The estimated 300,000-500,000 Nicaraguans in Costa Rica, legally and illegally, are an important source of mostly unskilled labor, but also place heavy demands on the social welfare system. The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) entered into force on 1 January 2009 after significant delays within the Costa Rican legislature. CAFTA-DR has increased foreign direct investment in key sectors of the economy, including the insurance and telecommunications sectors recently opened to private investors.

Gross Domestic Product (In USD):

$71.23 billion (2014 est.)

$68.82 billion (2013 est.)

$66.54 billion (2012 est.)

Composition of Gross Domestic Product:

% Agricuture: 6