Costa Rica’s Unemployment Rate Drops To 17.4%

• Unemployment in Costa Rica was 17.4% in the moving quarter from May to July 2021, according to the National Institute of Statistics and Census (INEC). 
• Compared to the same quarter of last year, unemployment in Costa Rica has decreased by 7.0 percentage points. However, the unemployment rate has remained relatively consistent throughout 2021. 
• Of the unemployed population, virtually all reported losing their job or struggling to find work due to causes related to the pandemic, INEC says. “Of the total number of unemployed people who were affected, 93.4% indicated that they cannot find work due to COVID-19, and 6.6% stated that they were fired, suspended, or closed their business or activity,” the report reads. 
• Meanwhile, the INEC calculated the underemployment rate — the percentage of employed people who work fewer than 40 hours a week and want to work more hours — at 15.5%, a decrease of 9 percentage points compared to last year. The May-July 2020 quarter represented Costa Rica’s highest-ever unemployment rate (24.4%), corresponding to strict COVID-19 measures. Costa Rica’s unemployment rate has oscillated between 17% and 19% in 2021. 
• Earlier this year Costa Rica entered into an Extended Fund Facility with the IMF to stabilize the economy and ensure debt sustainability while protecting the vulnerable. It is anticipated that the initiatives that will be taken under this agreement to boost growth and improve income distribution, as well as the country’s vaccination campaign will bolster recovery and a reduction in the unemployment rate. However, its weak fiscal position and public opposition to new government measures are still downside risks to this expectation.

(Source: Tico Times & NCBCM Research)