Economic overview
Since the early 1990s, Costa Rica’s economy has steadily expanded due to the country’s efforts to liberalize trade, stimulate foreign investment and attract tourists from around the world. The country’s long-term political stability also fosters expansion; Costa Rica has outpaced the average growth rate for Latin America for most of the last 15 years. Gross domestic product growth hit a high of 8.8% in 2006, but increased just 3.4% in 2013. The $45 billion economy is expected to grow about 3.1% this year—a forecast that reflects news of some major international corporations scaling back operations.
Tourism is big business in Costa Rica, and ecotourism is key. Agriculture also is important to the country’s economy, with bananas, coffee, sugar and beef driving exports. Technology is a growing sector. The standard of living for Costa Ricans is relatively high, with widespread land ownership. But poverty has ticked up in recent years, as the economy has slowed.
Business travel industry insight
Hospitality is one of fastest-growing sectors of the Costa Rican economy; travel and tourism bounced back from the economic downturn more quickly than other industries. An international convention center is planned to accommodate large-scale business meetings, but the long-delayed project has yet to break ground. The hope is that it will draw more business travelers to the country and spur related infrastructure, such as business-oriented hotels.
Opportunities
- The country’s new president led the charge for a campaign promoting Costa Rica to international investors; the effort will highlight the country’s political stability, experience with projects that bring together foreign and local backers and emphasis on eco-friendly business.
- The government has increased infrastructure spending to boost economic recovery and attract foreign investors.Costa Rica has a reputation for stability. Citizens enjoy better living standards than most of Central America, and international conflict is muted in this country with no standing army.Since passing one of the world’s first biodiversity laws in 1998, the country has successfully grown its economy while also protecting the wildlife and habitats. The country is an eco-business model for the rest of the world.
Challenges
- Earlier this year, Intel and Bank of America announced plans to cut 3,000 jobs in Costa Rica, prompting economists to lower their forecast for the country’s growth.
- Costa Rica ranked fourth behind Russia, Argentina and Ukraine on a list of countries confronting the biggest loss of investor confidence, according to a Bloomberg survey published in March.
- The government is battling a budget deficit expected to reach 6% of GDP this year, up from 5.4% last year.
- More than a fifth of Costa Ricans live below the poverty line.
When your business expands into new markets, BCD Travel can get your travelers where they need to be. Talk to your account manager about how we can support your company’s growth across the globe.
