Analysis by Region - Emerging Markets - Costa Rica

Analysis by Region - Emerging Markets - Costa Rica

Costa Rica's economic activity picked up in Q2 due to stronger-than-expected private consumption and investment performance, boosting the outlook. We've raised our 2023 GDP growth forecast by 0.9ppts to 3.9%, above consensus but backed by lax monetary policy, recovering real wages, and booming tourism. But risks are still tilted to the downside due to a rigid fiscal policy stance as authorities are committed to expenditure rationalization. We expect GDP to grow by 1.7% next year as momentum fades.