The Central Bank of Costa Rica (BCCR, for its acronyms in English) has adjusted the country’s economic growth projection for 2024 downwards, placing it at 4%. This figure is lower than the 4.3% predicted in October 2023.
The revision is based on more moderate household consumption, due to the deceleration of real disposable income. This indicator is expected to grow by 3.1%, compared to the 4% previously estimated.
This adjustment could have important implications for Costa Rican investors and consumers.
For investors, the reduction of the growth could imply lower purchasing power. This is because, with slower real disposable income, people will have less money to spend on goods and services.
In addition, the reduction in growth could generate greater economic uncertainty. This could make investors more cautious about investing in Costa Rica, which could affect long-term economic growth.
The following are some specific implications of the reduction in the growth projection for Costa Rican investors and consumer:
Investors:
- Lower profitability for investments in Costa Rican companies.
- Higher risk of losses for investments in Costa Rican financial assets.
- Greater difficulty in attracting foreign investment.
Consumers:
- Lower purchasing power to buy goods and services.
- Greater difficulty in saving and investing.
- Lower job availability.
The BCCR has indicated that it expects the Costa Rican economy to remain stable in the coming years. However, the reduction in the growth projection is a sign that the country’s economic recovery is slowing down.
Mariela Saborío Soto
mariela.saborio@garciabodan.com
Associate
García & Bodán
Costa Rica