The Economy of Costa Rica

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Economy - overview:

Costa Rica's basically stable economy depends on tourism, agriculture, and electronics exports. Poverty has remained at roughly 20% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Immigration from Nicaragua has increasingly become a concern for the government. The estimated 300,000-500,000 Nicaraguans estimated to be in Costa Rica legally and illegally are an important source of (mostly unskilled) labor, but also place heavy demands on the social welfare system. Foreign investors remain attracted by the country's political stability and high education levels, and tourism continues to bring in foreign exchange. The government continues to grapple with its large internal and external deficits and sizable internal debt. Reducing inflation remains a difficult problem because of rising import prices, labor market rigidities, and fiscal deficits. The country also needs to reform its tax system and its pattern of public expenditure. The current administration has made it a priority to pass the necessary reforms to implement the US-Central American Free Trade Agreement (CAFTA). CAFTA implementation would result in an improved investment climate.

GDP (purchasing power parity):

$48.77 billion (2006 est.)

GDP (official exchange rate):

$20.77 billion (2006 est.)

GDP - real growth rate:

4.7% (2006 est.)

GDP - per capita (PPP):

$12,000 (2006 est.)

GDP - composition by sector:

agriculture: 8.6%
industry: 31%
services: 60.4% (2006 est.)

Labor force:

1.866 million
note: this official estimate excludes Nicaraguans living in Costa Rica legally and illegally (2006 est.)

Labor force - by occupation:

agriculture: 20%
industry: 22%
services: 58% (1999 est.)

Unemployment rate:

6.6% (2006 est.)

Population below poverty line:

18% (2004 est.)

Household income or consumption by percentage share:

lowest 10%: 1.1%
highest 10%: 36.8% (2002)

Distribution of family income - Gini index:

46.5 (2000)

Inflation rate (consumer prices):

12.1% (2006 est.)

Investment (gross fixed):

19.4% of GDP (2006 est.)

Budget:

revenues: $3.134 billion
expenditures: $3.475 billion; including capital expenditures of $NA (2006 est.)

Public debt:

53.4% of GDP (2006 est.)

Agriculture - products:

bananas, pineapples, coffee, melons, ornamental plants, sugar, corn, rice, beans, potatoes; beef; timber

Industries:

microprocessors, food processing, textiles and clothing, construction materials, fertilizer, plastic products

Industrial production growth rate:

8.4% (2006 est.)

Electricity - production:

8.4 billion kWh (2004)

Electricity - consumption:

7.574 billion kWh (2004)

Electricity - exports:

440 million kWh (2004)

Electricity - imports:

202 million kWh (2004)

Oil - production:

0 bbl/day (2004)

Oil - consumption:

44,000 bbl/day (2004 est.)

Oil - exports:

NA bbl/day

Oil - imports:

NA bbl/day

Natural gas - production:

0 cu m (2004 est.)

Natural gas - consumption:

0 cu m (2004 est.)

Current account balance:

-$1.176 billion (2006 est.)

Exports:

$7.931 billion (2006 est.)

Exports - commodities:

bananas, pineapples, coffee, melons, ornamental plants, sugar; textiles, electronic components, medical equipment

Exports - partners:

US 42.6%, Hong Kong 6.9%, Netherlands 6.4%, Guatemala 4.2% (2005)

Imports:

$10.88 billion (2006 est.)

Imports - commodities:

raw materials, consumer goods, capital equipment, petroleum

Imports - partners:

US 41.3%, Japan 5.6%, Venezuela 4.8%, Mexico 4.8%, Ireland 4.3%, Brazil 4.2%, China 4.2% (2005)

Reserves of foreign exchange and gold:

$2.5 billion (2006 est.)

Debt - external:

$6.42 billion (30 June 2006 est.)

Currency (code):

Costa Rican colon (CRC)

Exchange rates:

Costa Rican colones per US dollar - 519 (2007), 477.79 (2005), 437.91 (2004), 398.66 (2003), 359.82 (2002)

Fiscal year:

calendar year

 

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