According to the latest projections from the World Bank, outlined in their recent report titled "Competition: the missing ingredient for growth," it seems like the Costa Rican economy is gearing up to take the lead in Latin America this year. This bodes well for the real estate market, as Costa Rica continues to be a solid and stable place to invest.
GDP and FDI for Costa Rica
In 2024, the national Gross Domestic Product (GDP) is expected to rise by a solid 3.9%. This growth spurt is poised to propel the country to the forefront of the region. What's fueling this surge? Well, it's largely driven by robust business confidence and a steady influx of Foreign Direct Investment (FDI), both of which have been on the rise.
Costa Rica has been shining bright on the FDI front, attracting investments across various sectors. From greenfield projects in hospitality, medical devices, to semiconductors, the country has been a magnet for capital investment. Recent data, covering the first nine months of 2023, particularly underscore a promising uptick in FDI announcements, notably in the medical device sector.
Strong Internal Expansion
Meanwhile, while most countries in Latin America and the Caribbean experienced moderate economic growth in 2023 due to sluggish investment and consumption, Costa Rica stood out with its robust internal expansion. This stands in stark contrast to others grappling with tighter monetary policies and labor market woes.
In terms of growth rankings, Paraguay (3.8%) and Nicaragua (3.7%) trail behind, securing the second and third spots respectively in Latin America.
Zooming out to the regional level, GDP is anticipated to expand by 1.6% in 2024, followed by 2.7% in 2025 and 2.6% in 2026. These growth rates, however, pale in comparison to other regions across the globe.
Carlos Felipe Jaramillo, the World Bank's vice president for Latin America and the Caribbean, rightly points out that sustained low growth isn't just an economic statistic; it's a roadblock to development. It translates to a reduction in public services, fewer job opportunities, stagnant wages, and widening poverty and inequality. The stagnation of economies ultimately shackles the potential of their people. Hence, decisive action is imperative to help Latin America and the Caribbean break free from this cycle.
Looking ahead, the projection for 2025 and 2026 indicates continued economic growth for Costa Rica, forecasted at 3.7%. Exciting times ahead indeed.