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Costa Rica, located in Central America, has an area of ??51,100 km2, making it one of the smallest countries.

Costa Rica, with a population of 5,278,000 people, is ranked 123rd in the population table, made up of 196 countries and has a population density of 103 inhabitants per km2.

Its capital is San José and its currency is Costa Rican Colones.

Costa Rica is the 74th economy by GDP volume. Its public debt in 2023 was 48,886 million euros, with a debt of 61.12% of GDP. Its debt per capita is 9,262 € euros per inhabitant.

The last annual CPI variation rate published in Costa Rica is from September 2022 and was 10.4%.

There are some variables that can help you learn more if you are going to travel to Costa Rica or simply want to know more about the standard of living of its inhabitants.

GDP per capita is a very good indicator of the standard of living and in the case of Costa Rica, in 2023, it was €15,154 euros, which places it in 63rd place in the ranking and its inhabitants have a low standard of living in relation to the rest of the 196 countries in the GDP per capita ranking.

As for the Human Development Index or HDI, which is prepared by the United Nations to measure the progress of a country and which ultimately shows us the standard of living of its inhabitants, it indicates that Costa Ricans are in 58th place.

If the reason for visiting Costa Rica is business, it is useful to know that Costa Rica is in 74th place out of the 190 that make up the Doing Business ranking, which classifies countries according to the ease they offer for doing business.

As for the Corruption Perception Index for the public sector in Costa Rica, it was 54 points, thus, it is ranked 48th in the corruption perception ranking made up of 180 countries.

In the tables at the bottom of the page you can find more information about the economy and demographics of Costa Rica and if you want to see information about any other country you can do so from economy countries

The published rankings take into account the countries for which we have data, as is the case with the texts that accompany them.


Costa Rica is one of the most open economies in the world with a trade openness index of approximately 60%

The Costa Rican economy is the twelfth largest economy in Latin America in terms of nominal Gross Domestic Product (GDP), whose main axes are agriculture, tourism and foreign sales of services and electronic equipment

According to the Global Competitiveness Index of the World Economic Forum, Costa Rica has a mixed economy that has undergone a strong evolution, going from being an eminently agricultural country to a service country, occupying third place among the nations with the greatest resources in Latin America and the Caribbean, behind Chile and Panama.

The above has been possible thanks to the strategies implemented in the international trade sector, since Costa Rica went from exporting less than 10 products in the eighties, to currently selling 4,500 goods abroad to more than 150 countries, and it also increased the investment of foreign companies.

As for export revenues, according to the Costa Rican Foreign Trade Promotion Agency (Procomer), the income from traditional agricultural products, such as bananas, sugar, cocoa and pineapple, continues to be important, with the production of high-quality coffee and its sale to the US market, where it is highly appreciated, standing out. However, the marketing of non-traditional products abroad, such as flowers and mini vegetables, has greatly surpassed the above, and the service sector has grown strongly in recent years and has generated more than 10,000 jobs.

For 2016, the Central Bank of Costa Rica (BCR) estimates that the manufacturing industry will grow by 5.6%; agriculture, by 4.2%; trade, by 4.6%; The information and communications sector will fall by 8.2%, and financial activities and insurance by 9.8%, while construction will fall by 5.8%, but it is still a very important sector in the country.

Currently, and according to the National Development Plan (PND) 2015-2018, Costa Rica has multiple Free Trade Agreements and reciprocal investment protection agreements, which has allowed preferential access to several countries and to carry out preferential negotiations in an environment that exceeds 2.5 billion potential consumers.

Likewise, President Luis Guillermo Solís expects that with the PND 2015-2018 the Costa Rican economy will grow by 4.2% in 2016 and 4.3% in 2017, driven mainly by domestic demand; projections that are associated with an increase of 4.4% of the GDP.

However, the administration of President Solís expects that the country's economic growth will go hand in hand with more quality jobs and the unemployment rate will go from 8.6% in 2015 to 7% in 2016 and 4% in 2030. Likewise, they will attend to the comprehensive needs of 42,000 families to lift them out of extreme poverty, reducing inequality and improving the perception index against corruption.


THE TWO FACES OF THE ECONOMY IN COSTA RICA

Costa Rica stands out internationally for the exceptional performance of its economy, especially the accelerated growth of productivity and technological manufacturing exports. However, is this the economic reality of most companies in the country? The short answer is: no.
To illustrate this paradox in a simple way, we can imagine the economy as an air fleet in which people travel in two types of planes. The first would be a modern jet that travels at high speeds, but has a limited passenger capacity. The second type would be a commercial aircraft that can transport more people, but travels with greater difficulty taking off.
In this analogy, the jet symbolizes the free zone companies[i], which have achieved extraordinary increases in the growth of added value (13%) and productivity (10.9%; Vega and Jiménez, 2023). However, this sector represents a small part of the economy: it constitutes 14% of the GDP and 11.5% of the country's employment. In contrast, 86% of production and 88.5% of employed people travel by commercial plane, characterized by slower growth (3%) and stagnant productivity (chart 1). These results show that it is not enough to analyze the average dynamism of the economy, since they do not reflect the disparity that exists between the sectors that grow and export the most compared to the rest that are dedicated to the local market.

The disparities that exist in the productive sector are due to several factors, among which a more adverse business climate for production outside free trade zones stands out (Jiménez Fontana, et al., 2023), an institutionality with difficulties in applying articulated policies (PEN, 2022) and gaps in the tax burden paid by companies (PEN, 2023b). These limitations affect the survival of companies over time. For example, while a large company has a 90% chance of reaching its fifth year of operation, for a micro company this indicator is 55% (chart 2). On average, the largest, foreign-owned, agro-exporting or technologically manufacturing companies have a longer life expectancy. On the other hand, entities with national capital, micro companies or those dedicated to construction face greater difficulties in surviving.

Undoubtedly, the fact that a part of the economy operates like a high-speed jet is a remarkable achievement. This success has been the result of more than two decades of both public and private efforts that have focused on increasing and improving the exportable supply and global value chains in the country (Meneses Bucheli, et al., 2021). However, after so many years of having free trade zones in operation, we cannot continue to expect that the benefits they generate will be multiplied to the majority of the population (Meneses Bucheli and Córdova Montero, 2021). The country requires effective policies with a territorial and sectoral approach that can boost the growth of production outside the free trade zones.
Two years ago, in this same space, the importance of getting out of the bubble to avoid the “trap of averages” was raised. Looking beyond the general indicators allows us to understand with greater precision the limitations faced by the most excluded groups in the country. In this context, the country requires more inclusive productive development policies that consider the most backward companies, sectors and territories. The fact that part of the economy travels at high speed by jet does not mean that this is the reality for most businesses or that it generates broad impacts on human development. If the country does not solve key problems such as the educational crisis (PEN, 2023a), the lag in productivity, low investment in science, technology and innovation (Micitt, 2024), limited linkages and moderate growth in production outside free trade zones, most people in the country will continue to travel by commercial plane. Costa Rica's dilemma: how to prevent its 'jaguar economy' from devouring the vulnerable population?
The brilliant macroeconomic indicators do not translate into a reduction in inequality or strengthen the battered welfare system. Protecting the basics and reducing tensions are possible routes, according to experts

A report from a division of the Bank of America in February described Costa Rica as a 'jaguar economy' due to its rate of production growth, the dynamism of exports linked to technology, the very low inflation with which it closed 2023 and the notable improvement in fiscal figures. President Rodrigo Chaves announced this exultantly in one of his weekly televised press conferences when comparing his country's moment with the years of the "Asian tigers" in the second half of the 20th century. But, for many Costa Ricans, that feline is passing by or is threatening them.
The macroeconomic figures used in that investment promotion report on Costa Rican bonds are true. The Central American nation recorded a GDP growth of 5.1% in 2023, the highest among all members of the Organization for Economic Cooperation and Development (OECD). It was the country with the lowest inflation (-1.8%) in Latin America. It showed a drop in unemployment to less than 8% and an improvement in the average real salary. The debt/GDP ratio fell two points to 61% and the rating agencies improved the credit rating, after the IMF approved the fulfillment of fiscal goals due to austerity measures approved during the previous government.
“Look how beautiful! This is not going to be said by the news here or the local analysts,” said Chaves in his usual scathing style, anticipating numerous objections that have been pointed out by the local press, academia, independent specialists, unions, opposition parties and even the Catholic Church. The good macroeconomic numbers conceal the conditions in which large groups of the population live and the growing gap with the most advantaged sectors.
Costa Rica is the OECD country with the worst income inequality, according to data for 2022, with no signs of improvement in 2023, as the decline in social investment recorded in the last decade continued. Between 2014 and 2024, social investment went from 50% of the central government budget in 2014 to 38%, according to reports from the Comptroller General's Office. In 2022, 28% of scholarships for poor students were cut. Costa Rica is the nation with the highest percentage of poverty among OECD nations, stagnating at more than 20% during this century regardless of how much GDP grows or who governs. It is fertile ground for drug trafficking organizations, whose fights pushed the country to its worst homicide record in history, although without affecting so far the recovery of the tourism industry after the pandemic or the arrival of investments, which rather flood the economy with dollars and have led to the lowest exchange rate in 10 years.
The Government has reported that there is now fiscal solvency and that the revaluation of the colon is a "sign of success", but when it comes to allocating money to education, scholarships, health or social housing, the reality is different. It is not enough, said the Minister of Finance, Nogui Acosta, awarded as the best finance minister in 2023 by The Banker magazine. “The Ministry of Finance will make all necessary efforts to carry out this transfer of resources, as long as macroeconomic, fiscal and budgetary conditions allow it,” he responded when deputies questioned him about how to reverse the reduction of 110,000 scholarships for poor students recorded in 2022. He thus recognized that the priority of the moment is the financial indicators and not the recovery of the welfare system that for decades placed Costa Rica in a place of international admiration.
“Where are we going to get them (the resources) from?” Acosta asked himself in response to questions from the press, after hearing a majority of deputies criticize the Government's priorities. “There are two Costa Ricas, one of the macroeconomy, and another of those who try to survive,” a liberal legislator told him. “Fiscal figures take precedence over people's quality of life,” criticized a right-wing parliamentarian. “We are living with very expensive savings, because it perpetuates poverty,” lamented a legislator from the social democratic wing. “The ‘jaguar economy’ is what eats up scholarships and social investment,” added a left-wing legislator.
Dressing saints without undressing others
The dilemma consists of dressing saints without undressing others, the figure used to explain the dilemma by the economist and consultant Alberto Franco, former director of the Central Bank of Costa Rica, former director for Costa Rica at the Inter-American Development Bank (IDB) and representative of the current Government in its first six months at the Central American Bank for Economic Integration (CABEI). “We must open ourselves to the possibility of reviewing each expense or uncovering some of the indicators, but we cannot stop covering the priority in key areas, such as education, health and security or poverty.” Franco explains that it should not only be addressed for social justice reasons or because it has traditionally been a hallmark of the Costa Rican system, but also because in the medium term, this investment will yield a measurable return in macroeconomic terms. “Leaving thousands of children without access to education today will make us pay a very high price in a short time,” says Franco, warning that international organizations also expect from Costa Rica a balance between financial stability and social peace.


For this reason, Franco finds Nogui Acosta's message about the need to prioritize fiscal stability and macroeconomic indicators to "create spaces" to increase social investment understandable, but admits that there may be risks. "I applaud the country's efforts to put its finances in order since 2018, but management at this time must be fine so as not to affect those essential areas that give us social profitability." Other analysts and opposition deputies suspect that the spending restraint in 2024 may be due to an intention to increase it in 2025 to improve the image before the elections in February 2026, although the law prevents Chaves from immediate reelection.
For the moment, Chaves celebrates it and insists every week at his press conference: "Costa Ricans, we are doing well," but he does not always go into the details of the data, and sometimes dilutes the truth. For example, it praises the lowest unemployment rate in 14 years, but avoids saying that this is not due to massive job creation, but is related to the exit of more than 100,000 people from the labor market in the last year, especially women, young people and people with lower educational levels, for various reasons that constitute a “yellow alert,” according to an analysis by the Central Bank in January.
Only a part of the population benefits from the dynamism of exports of goods such as medical devices and other products manufactured under a special regime that grew in 2023 by more than 10%, three times more than traditional companies, although it contributes a seventh of the GDP and less than an eighth of the jobs. It is the continuity of the “two faces of Costa Rica” that different reports have pointed out during the last two decades, a period in which the country has increased inequality, in the opposite direction to the average trend in Latin America. The economic recovery after the pandemic has also widened the gap.
There are also adverse conditions hidden in the inflation figure. It is true that it closed in 2023 with a negative figure, but it is not enough to compensate for the increases in 2021 and 2022, which means that families now continue to pay higher prices than three years ago, said Alberto Franco, who reiterated the need to strengthen basic assistance programs for households in poverty or close to falling into it.
This is what the bishops of the Catholic Church also requested in a harsh message at the end of February: “Our model of socioeconomic organization has proven to be structurally incapable of significantly reducing poverty. There are no perceived measures to alleviate poverty. The country's social investment has been rapidly collapsing,” the prelates criticized in the declaration, before launching among their recommendations the need to resume dialogue between sectors and between powers. Economist Franco and the 2023 report from the State of the Nation research center agree with them: the relevance of the Executive and Legislative branches lowering tension and making decisions that allow solving the needs of the population through political methods that are part of the “country brand.”

These are the agreements that Michael Jiménez, 39, is asking for. He feeds his family with the little he earns as a food delivery man through digital platforms. He has no social security, he does not contribute to a pension and his eldest son left school to look for work, but he has not found one yet. At home they never make more than two meals. “I was a mechanic, but the boss closed the workshop during the pandemic and I was left on the street. I was able to buy a motorcycle on credit to work in this, but for many it is very hard. In politics, one only sees disputes between the Government and the deputies and that does not achieve anything. I do not know who is right, but I do know who suffers, those of us at the bottom.”

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