Macroeconomic Forecast Costa Rica

BMI View: The outlook for economic growth in Costa Rica is looking increasingly ominous this year and next. A deteriorating external position will mean that net exports impose a greater drag on growth. Meanwhile, domestic demand should start to cool on lower business and consumer confidence, and moderating fixed investment growth (due in large part to the slowdown in the US). Unsurprisingly, then, we have trimmed our real GDP growth projections for 2008 and 2009 to 4.2% (from 5.3%) and 4.8% (from 4.8%) respectively. Moreover, we warn that the risks could lean to the downside should the US suffer a more pronounced economic downturn than currently expected.

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