Macroeconomic Forecast Costa Rica

April 2008 | Macroeconomic Forecasts

Foreign reserves increased by US$1bn in 2007 to US$4.1bn, owing to high levels of foreign direct investment (FDI) and the central bank's purchases of US dollars in order to maintain the colón within a restricted band. This year, a slowdown in FDI stemming from the US economic downturn and deteriorating prospects for tourism in the near term will reduce upside pressure on the external accounts. Our US$4.3bn year-end forecast for reserves is conservative, particularly given the US$4.4bn level recorded in January, but there are signs from the forex market that inflows have already begun to slow.

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