Economic growth eases in the first quarter of 2026

GDP growth slows to an over one-year low in Q1: Costa Rica's GDP expanded 3.7% on a year-on-year basis in Q1, a downward revision from the preliminary estimate of 4.0% and following 4.4% growth in the previous quarter. Q1's reading was the weakest since Q3 2024. On a seasonally adjusted quarter-on-quarter basis, economic output increased 0.4% in Q1, following a 0.5% expansion in the prior quarter.

Private spending and exports slow: Compared with the prior quarter's data, readings in Q1 worsened for private consumption (+3.5% on a year-on-year basis vs +4.3% in Q4), exports of goods and services (+4.6% vs +9.0% in Q4) and imports of goods and services (+0.8% vs +2.3% in Q4). In contrast, readings picked up for government consumption (+2.7% vs +2.4% in Q4) and fixed investment (+7.1% vs +4.7% in Q4).

Panelist insight: Ricardo Gómez from Oxford Economics commented on the outlook: “We’ve lowered our 2026 GDP growth forecast by 0.3ppts to 3.4%, reflecting weaker-than-expected Q1 activity and our expectation of a broad-based moderation across sectors. Softer external demand for manufactured goods, compounded by the strength of the colón, will continue to constrain export growth and weigh on activity in free-trade zones.” Meanwhile, EIU analysts project an even sharper deceleration in GDP growth: “We forecast that economic growth will slow from 4.6% in 2025 to 3.2% in 2026 owing largely to the changing conditions facing the external sector. Exports of goods and services grew by 8.6% in 2025, but this pace of growth will moderate in 2026 given US tariffs and a global economy hit by an energy price shock. The soaring colón will also continue to make Costa Rican goods and services (tourism) less competitive. This will work against the support provided to private consumption and investment from the central bank's monetary loosening, which we think concluded in 2025.” 

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