Costa Rica

Costa Rica’s economic outlook for 2026-2027 is marked by moderate but resilient growth, with GDP expected to expand by +3.4% in 2026 and +3.5% in 2027. This positions Costa Rica among the fastest-growing OECD economies, though momentum is slowing from previous years. Key cyclical risks stem from external shocks, particularly the country’s high dependence on the US market. Recent US tariff hikes on Costa Rican exports, especially in manufacturing, are expected to dampen export growth and foreign direct investment. Domestic demand remains a key growth driver, supported by stable inflation (projected at 0.8% in 2026 and 2.1% in 2027) and low interest rates. However, sectors serving the local market – such as construction, agriculture and public administration – are showing stagnation or contraction, highlighting a two-speed economy. Global geopolitical tensions and commodity price volatility also pose downside risks, while the ongoing recovery in tourism and business services offers some upside potential.

Costa Rica’s business environment benefits from a robust legal framework and political stability, which continue to attract FDI, particularly in high-value manufacturing and services. However, persistent infrastructure bottlenecks – especially in roads, ports and energy – remain a drag on competitiveness. The productivity gap with OECD peers is still wide, and the domestic economy lags behind the dynamic export sector. Regulatory complexity and slow bureaucratic processes can hinder business operations, while the education system struggles to align skills with labor market needs. The government is encouraged to prioritize investment in strategic infrastructure, digitalization and education reform to sustain competitiveness. Efforts to diversify export markets and reduce dependence on the US are ongoing but remain incomplete. The energy sector, while a global leader in renewables, faces modernization challenges and vulnerability to climate shocks.