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COUNTRY INSIGHTS

Hanging tight
CENTRAL AMERICA · Report · 30 Jul 2025

Costa Rica’s economy is entering period of underperformance, masked by currency appreciation and near-zero inflation. GDP growth is slowing more sharply than expected, driven by weakening domestic demand, restrictive monetary policy and global trade tensions, particularly due to new tariffs impo...

Intel to close Costa Rica assembly plant: a wake-up call for a high-value investment strategy
CENTRAL AMERICA · In Brief · 28 Jul 2025

Last week, semiconductor giant Intel announced it will shut down its assembly and testing operations in Costa Rica, relocating them in Malaysia and Vietnam. The move represents a significant setback for the country, given Intel’s outsized role in boosting service export figures. Prior to the comp...

Bracing for impact
CENTRAL AMERICA · Report · 27 Jun 2025

Costa Rica’s economic activity continues along the path set in our short-term economic outlook (see our report of April 2025), although deceleration now looks more pronounced. To face the effects of the current international turmoil charged with lots of uncertainty, we expect the government to ma...

Slowdown and remittance fears
CENTRAL AMERICA · Report · 27 May 2025

Costa Rica’s economy is entering a clear slowdown phase, after two years of strong post-pandemic momentum. GDP growth decelerated to 3.9% y/y in Q1 2025, driven by a sharp weakening in the domestic (definitive) regime, which accounts for the bulk of national output. While free trade zone activity...

Slowdown and trepidation
CENTRAL AMERICA · Report · 29 Apr 2025

El Salvador’s economic trends in 2024 looked like a return to the long-run results characteristic of the pre-pandemic decade: relatively weak economic activity, growth of 2% to 2.5% y/y; weak public sector results, leading to very high public debt; and worries about long-run fiscal sustainability...

Mixed prospects
CENTRAL AMERICA · Presentation · 31 Mar 2025

Guatemala posted solid economic growth in 2024, with GDP rising 3.7%, supported by strong remittances, resilient domestic demand and improving investor confidence under the new administration. Inflation fell to 1.7%, reserves hit a record high and the fiscal deficit narrowed to 1% of GDP. While m...

Volatile times bringing surprising favor to the region
CENTRAL AMERICA · Report · 26 Feb 2025

Costa Rica dealt with an array of factors that slowed economic activity in 2024. However, real GDP growth outperformed our forecast, although growth was lower than in 2023. Domestic and external exogenous elements influenced the economic deceleration, such as a restrictive monetary policy stance ...

Preparing for global challenges
CENTRAL AMERICA · Report · 28 Jan 2025

Costa Rica is facing fiscal challenges that require strong policy actions to ensure long-term sustainability. Progress made in previous years improved fiscal indicators. Nevertheless, for the second year in a row there has been a slight deterioration in some fiscal data. The lack of a formal agre...

Bracing for Trump, after a reasonable 2024
CENTRAL AMERICA · Report · 20 Dec 2024

In Costa Rica, political confrontation between the Executive branch and Congress and the Judiciary persists. President Rodrigo Chaves’ style, which resembles that of other authoritarian and populist presidents in this hemisphere, also shares with those leaders’ popularity in the polls. Consequenc...

Worry in the runup to a second Trump administration
CENTRAL AMERICA · Report · 27 Nov 2024

El Salvador’s macroeconomic conditions are worsening. Economic activity has continued to be relatively stagnant, and has yet to show positive results from economic policy actions other than in some scattered indicators, such as in tourism. Foreign remittances have decelerated, while the fiscal de...

A mixed performance
CENTRAL AMERICA · Report · 29 Oct 2024

In Costa Rica, praise for national economic management, and early-year successful evaluations from external analysts then embraced by the official discourse, now seem premature, as the country is falling short in several macroeconomic indicators. Economic activity is still increasing nicely, but ...

Hopes deferred
CENTRAL AMERICA · Report · 30 Sep 2024

El Salvador’s short-term economic outlook looks less hopeful we projected in our April 2024 report, after analyzing H1 trends. Deviation from key assumptions we made in the April forecasting exercise has turned perspectives less favorable. The eventual better performance that we expected either c...

High hopes for Guatemala, as neighbors struggle
CENTRAL AMERICA · Report · 30 Aug 2024

In Guatemala, private sector confidence has improved since President Bernardo Arevalo took office in January, and expectations within the country are high. In Bank of Guatemala surveys, most respondents said they expected the economic situation to improve in the next six months. Arevalo is workin...

Challenging times
CENTRAL AMERICA · Report · 29 Jul 2024 · 1 response

Costa Rica experienced a deceleration in several key macroeconomic indicators during H1 2024. According to latest official data, economic activity growth slowed due to a combination of external and internal factors. Externally the economic situation was stable, with low growth rates of most tradi...

High hopes and mixed signals
CENTRAL AMERICA · Report · 28 Jun 2024

Costa Rica’s political conditions have stayed the same for the past two years, with strained relationships between President Rodrigo Chaves and members of the congressional opposition now adding to Chaves’ renewed criticism of the Comptroller General. Recall that during these past two years the p...

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