Costa Rican Growth Will Slump In Short-Term, Slowly Recover In Coming Years

  • Real GDP in Costa Rica will significantly contract through the end of 2020 amid the COVID-19 pandemic before a sluggish recovery begins in 2021, supported by rebounding domestic commercial activity and tourism inflows.
  • The likelihood of fiscal austerity in the coming years will limit public expenditures, push unemployment higher, and restrict private consumption, capping the country‚Äôs longer-term upside.
  • Fitch Solutions revised its 2020 and 2021 real GDP growth forecasts to -5.3% and 3.0% y-o-y, from -4.1% and 3.1% previously, as the COVID-19 pandemic will have a more severe impact on short-term growth than previously expected.

(Source: Fitch Solutions)