Rising Import Demand To Keep Costa Rica's Current Account Deficit Wide In 2021, 2022

  • Fitch Solutions forecast Costa Rica’s current account deficit will be 2.8% of GDP in 2021 and 2.7% of GDP in 2022, from 2.2% in 2020, due to rising import growth and a growing primary income account deficit. 
  • A broadening economic recovery will cause the goods trade deficit and primary income deficit to widen in the near term, though stronger tourism activity in 2022 onwards will help bolster services exports. 
  • Higher international reserves in 2022 will provide a financial buffer and stabilise Costa Rica’s external position over the coming quarters as the government implements fiscal austerity measures as a condition of its USD1.8Bn IMF deal. 
  • Costa Rica reached a fiscal deficit of 3.89% of Gross Domestic Product (GDP) in the first nine months of 2021, lower than the 6.43% posted in the same period last year, the Ministry of Finance reported Monday.

(Source: Fitch Solutions & The Rio Times)