Durrant Pate/ Contributor

The International Monetary Fund (IMF) is forecasting that the Costa Rican economy will experience solid growth in 2025, outpacing many of its Central American counterparts. 

The forecasts point to a moderate slowdown in the second half of 2025 but still a strong performance compared to many regional peers. Costa Rica’s economic growth is expected to be around 3.4% to 3.5% this year, supported by robust fundamentals, sound policies, and a diverse economic base.

This anticipated growth rate marks a slight moderation from the higher rates seen in recent years, where Costa Rica averaged over 5% growth annually since 2021. The slowdown reflects global and regional headwinds, including weaker external demand, tighter global financial conditions, and increased policy uncertainty.

Sustaining the continued growth momentum

Despite these challenges, the country’s strategic location, strong export sectors, particularly in technology and business services, and economic diversification are expected to sustain its continued growth momentum. 

The IMF is reporting that the fiscal situation has improved with public debt declining steadily below 60% of GDP and ongoing fiscal consolidation efforts, while inflation is forecast to moderate and align with the Central Bank’s target of 3% by 2026. 

In addition, Costa Rica has secured a US$1.5 billion flexible credit line from the IMF, providing a buffer against external shocks, underlining strong policy frameworks and economic resilience. Key sectors driving growth include financial services, agriculture, construction, and the service sector, notably high-value industries like technology, business process outsourcing, and tourism. 

Free trade zones remain vital, attracting foreign investment and supporting export growth. While growth is expected to be positive, risks remain on the downside from external pressures such as the US economic slowdown, tariff impacts, and global uncertainties. 

Nevertheless, Costa Rica stands out in Central America for its strong economic fundamentals and steady policy progress, positioning it well to maintain its role as a leading regional economy in 2025. This growth forecast contrasts with some of our neighbouring countries facing more significant economic challenges, highlighting Costa Rica’s relative stability and resilience in a complex global environment.

In spite of the country facing ongoing challenges, including managing public spending and expanding opportunities for broad-based economic participation, Costa Rica’s outlook for 2025 remains generally optimistic and more favourable than other Central American nations.