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The Economy of Costa Rica

Costa Rican Economy

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Economy - overview: Costa Rica's basically stable economy depends on tourism, agriculture, and electronics exports. Exports have become more diversified in the past 10 years due to the growth of the high-tech manufacturing sector, which is dominated by the microprocessor industry and the production of medical devices. Tourism continues to bring in foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the fiscal incentives offered in the free-trade zones. Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. Poverty has remained around 20% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Immigration from Nicaragua has increasingly become a concern for the government. The estimated 300,000-500,000 Nicaraguans in Costa Rica legally and illegally are an important source of - mostly unskilled - labor, but also place heavy demands on the social welfare system. Under the ARIAS administration, the government has made strides in reducing internal and external debt - in 2007, Costa Rica had its first budget surplus in 50 years. Reducing inflation remains a difficult problem because of rising commodity import prices and labor market rigidities, though lower oil prices will decrease upward pressures. The Central Bank is moving towards a more flexible exchange rate system to focus on inflation targeting by 2010. The US-Central American Free Trade Agreement (CAFTA) entered into force on 1 January 2009, after significant delays within the Costa Rican legislature. Nevertheless, economic growth has slowed in 2009 as the global downturn reduced export demand and invesment inflows.

GDP:

GDP - real growth rate: 3% (2008 est.) 6.8% (2007 est.) 8.8% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 7.6% industry: 29.1% services: 63.3% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 1% highest 10%: 37.4% (2003)

Distribution of family income - Gini index: 48 (2008)

Inflation rate (consumer prices):

Labor force: 1.957 million note: this official estimate excludes Nicaraguans living in Costa Rica (2008 est.)

Labor force - by occupation: agriculture: 14% industry: 22% services: 64% (2006 est.)

Unemployment rate: 5.6% (2008 est.)

Budget: revenues: $4.604 billion expenditures: $4.552 billion (2008 est.)

Industries: microprocessors, food processing, medical equipment, textiles and clothing, construction materials, fertilizer, plastic products

Industrial production growth rate: -0.8% (2008 est.)

Electricity - production: 8.918 billion kWh (2007)

Electricity - production by source:

Electricity - consumption: 7.779 billion kWh (2006 est.)

Electricity - exports: 77.16 million kWh (2008 est.)

Electricity - imports: 203.2 million kWh (2007 est.)

Oil - production: 0 bbl/day (2004)

Oil - consumption: 44,000 bbl/day (January 2009)

Oil - exports: 2,115 bbl/day (2005)

Oil - imports: 43,110 bbl/day (2005)

Oil - proved reserves: NA bbl

Natural gas - production: 0 cu m (2007 est.)

Natural gas - consumption: 0 cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 0 cu m (2007 est.)

Natural gas - proved reserves: 0 cu m (1 January 2006 est.)

Agriculture - products: bananas, pineapples, coffee, melons, ornamental plants, sugar, corn, rice, beans, potatoes; beef, poultry, dairy; timber

Exports: $9.675 billion (2008 est.)

Exports - commodities: bananas, pineapples, coffee, melons, ornamental plants, sugar; seafood; electronic components, medical equipment

Exports - partners: US 25.7%, China 14.1%, Netherlands 10.9%, UK 6.3%, Mexico 5% (2007)

Imports: $15.37 billion (2008 est.)

Imports - commodities: raw materials, consumer goods, capital equipment, petroleum, construction materials

Imports - partners: US 41%, Mexico 6.1%, Venezuela 5.7%, Japan 5.4%, China 5.1%, Brazil 4.3% (2007)

Debt - external: $7.401 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: Costa Rican colones (CRC) per US dollar - 530.41 (2008 est.), 519.53 (2007), 511.3 (2006), 477.79 (2005), 437.91 (2004)

Fiscal year: