Economic growth accelerates in the third quarter of 2025

GDP growth accelerates to an over one-year high in Q3: Costa Rica's GDP grew 5.2% on a year-on-year basis in Q3, following a 3.7% expansion in the previous quarter. Q3's reading was the strongest since Q2 2024. In seasonally adjusted quarter-on-quarter terms, economic output expanded 1.3% in Q3, following a 2.0% expansion in the previous quarter.

Stronger domestic demand and resilient exports drive momentum: Relative to the previous quarter's data, figures in Q3 improved for private consumption (+3.8% in annual terms vs +3.1% in Q2), fixed investment (+3.5% vs +2.9% in Q2), exports of goods and services (+11.8% vs +7.0% in Q2) and imports of goods and services (+9.5% vs +3.5% in Q2). In contrast, the reading for government consumption softened in Q3 (+2.0% vs +2.3% in Q2).

Domestic demand to support GDP growth ahead: Our panelists see GDP growth remaining broadly unchanged in 2026 from its 2025 rate, undershooting the pre-pandemic decade average of 3.8% for the third year in a row but remaining close to the Central American average. Higher growth in public spending ahead of the 2026 elections, a stronger rise in fixed investment, and resilient private spending should sustain momentum, offsetting the headwinds from weaker export growth. Meanwhile, Costa Rica’s key services sector should come under pressure from softening tourism activity amid rising crime rates and the strongest colón in over a decade vs the USD.

Panelist insight: Oxford Economic’s Ricardo Gómez commented on the outlook: “Looking ahead to next year, we forecast export growth will slow sharply to 0.8%, reflecting lagged effects from US tariffs, weaker external demand, and the closure of some manufacturing operations. At the same time, robust import growth of 6.2% will weigh on overall performance, dragging GDP growth down to 2.4%. Nonetheless, we expect domestic demand to remain resilient, expanding by 4% despite external headwinds. That said, we see the balance of risks slightly tilted to the upside, supported by sustained momentum in manufacturing and technology-related activities within the free trade zones, as well as the possibility of renegotiating more favorable tariff terms with the US.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Costa Rican government consumption projections for the next ten years from a panel of 6 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable government consumption forecast available for Costa Rican government consumption.

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