Macroeconomic Forecast Costa Rica

Costa Rica's merchandise trade deficit shrank by 66.3% y-o-y to US$0.8bn in the first five months of the year, driven by a massive 33.6% collapse in imports to US$4.3bn (significantly outstripping the contraction in exports of 15.5%). While these numbers were more reflective of the caving in of Costa Rican domestic demand, we are likely to see a significant improvement in the country's current account dynamics as a result. We are forecasting a current account deficit of just 4.2% of GDP in 2009 (down from 8.9% in 2008), which would mark the narrowest shortfall in eight years.

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