Costa Rica’s Economy Cools but Stays Solid in 2026
ECONOMY · COSTA RICA
Key Facts
- —Who Costa Rica’s central bank (BCCR), statistics office (INEC), finance ministry (Hacienda) and the International Monetary Fund (IMF).
- —What The central bank expects growth of 3.4% in 2026, after 4.6% in 2025 (IMF). Prices are falling slightly year on year, and the policy rate is 3.00%.
- —Why it matters Growth, interest rates, the colón and public debt shape costs and returns for expats, investors and businesses in Costa Rica.
- —Country context A Central American nation and a hub for free-trade-zone exports to the United States.
How is Costa Rica’s economy doing in 2026?
Costa Rica’s economy is still growing in 2026, but it is cooling. The central bank (Banco Central de Costa Rica, BCCR) expects growth of 3.4% this year. The IMF puts growth in 2025 at 4.6%.
Prices are slightly lower than a year ago. Annual inflation was minus 0.17% in August, the sixteenth month of falling annual prices in a row, according to the national statistics institute (INEC). That gave the central bank room to cut its policy rate to 3.00% in July. On 24 September it held the rate there.
The picture is steady rather than strong. Unemployment is near 7%, public debt is edging up and the next rate decision is due on 26 November.
The data at a glance
| Indicator | Latest figure | Date | Source |
|---|---|---|---|
| GDP growth (BCCR forecast) | 3.4% for 2026; 3.5% for 2027 | 30 July 2026 | BCCR |
| GDP growth (IMF forecast) | 3.6% for 2026 (2025 actual: 4.6%) | 29 May 2026 | IMF |
| Inflation (annual CPI) | minus 0.17% | August 2026 | INEC |
| Policy rate (TPM) | 3.00%, cut from 3.25% in July, held on 24 September | September 2026 | BCCR |
| Unemployment | 6.7% (6.0% a year earlier) | June to August 2026 | INEC |
| Colón per US$1 (sale reference) | ₡458.43 | 30 September 2026 | BCCR reference |
| Central government debt | about 61% of GDP (60.4% at end-2025) | mid-2026 | Hacienda |
Growth: slower than last year
The BCCR trimmed its 2026 forecast twice this year. In April it cut the figure to 3.5%. In July it lowered it again to 3.4%, and it sees 3.5% in 2027.
The IMF is a little more upbeat. Its Executive Board concluded the 2026 Article IV review on 29 May 2026. Staff expect 3.6% growth this year and a long-run potential of about 3.5%.
The BCCR cites the conflict in the Middle East, which began in late February, as a source of global uncertainty. The two forecasts differ by 0.2 percentage points, so the range is narrow.
Prices and the policy rate
Inflation is the most unusual part of the story. Costa Rica has now spent 40 months below the BCCR tolerance range of 2% to 4%, which surrounds its 3% target. Annual inflation has been negative for 16 months in a row, according to INEC.
The monthly drop in August came mostly from transport. Cheaper petrol, new cars and diesel pulled the index down. Food prices rose and offset part of that.
INEC also changed the CPI methodology in July 2026. The new base is June 2026 equal to 100.
The BCCR expects inflation to stay above 2% but below 3% over the next two years. The July cut of 25 basis points, to 3.00%, was the first in seven months. A basis point is one hundredth of a percentage point. At its 24 September meeting the bank held the rate, and the next meeting is on 26 November.
The colón: a softer September
The colón appreciated through the first half of 2026, according to the BCCR. The bank runs a floating regime with intervention to prevent sharp swings.
September brought a partial reversal. The BCCR reference sale price was ₡451.72 per US$1 on 2 September. It fell to ₡448.21 on 17 September, then rose to ₡458.43 on 30 September. On 1 October it was ₡460.73.
A higher number means a weaker colón. So the currency lost ground in the last two weeks of September. One month does not make a trend. The US$ conversions in this article use ₡458.43 per US$1, the 30 September sale reference.
Public finances: surplus, but debt is rising
The government has run a primary surplus for six years. That is the budget balance before interest. In the first half of 2026 it was ₡513.1 billion (about US$1.1 billion), or 1% of GDP, according to Hacienda.
Interest costs eat that gain. The financial deficit was ₡653.8 billion (about US$1.4 billion), or 1.2% of GDP, in the same period. Interest payments came to about ₡1.17 trillion (about US$2.5 billion). That is 30.8% of government revenue.
Central government debt stood at about 61% of GDP in mid-2026, or ₡32.45 trillion (about US$70.8 billion) at the end of June. It ended 2025 at 60.4%, so the ratio is up slightly this year.
Tax revenue fell 0.5% in the first half. VAT receipts dropped 3.5%, while income tax rose 4.6%. The IMF has approved a review of Costa Rica’s Flexible Credit Line, a precautionary facility worth about US$1.5 billion. It acts as an insurance policy against shocks.
The honest downsides
- Unemployment is high for a middle-income success story. INEC measured 6.7% for June to August 2026, against 6.0% a year earlier. It was 7.1% in January to March. See our report on Costa Rica unemployment rising to 6.7%.
- Informality is large. About 36% of workers were in informal jobs in the second quarter, according to INEC figures reported by the press.
- Debt is rising again. The ratio is up from 60.4% at the end of 2025.
- Revenue is weak. A 0.5% fall in tax collection leaves little room for investment or a larger shock.
- Flat prices are not all good news. Falling prices can reflect weak domestic demand and can delay spending.
- The external gap is widening. The BCCR expects the current account deficit to widen against GDP this year. Our analysis of the second-quarter current account has the detail.
What it means for you
Expats and residents. Prices are broadly stable, which helps anyone living on a fixed foreign income. For the practical side, see our guide to residency in Costa Rica. The colón’s September slide means US$ income bought more colones at month-end than in mid-September. Many larger purchases and some rents are priced in US$, so check the currency in every contract.
Investors. Growth near 3.5% is steady, and the IMF credit line adds a safety net. The debt ratio and the tax gap are the numbers to watch. Lower rates may help borrowers, but the rate is on hold for now.
Foreign businesses and remote workers. The free-zone model remains the country’s main draw. US trade policy is the main outside uncertainty. For wider context, see the Costa Rica hub and our report on the new government’s economic agenda.
What to watch
- Early October: INEC publishes September inflation. August was minus 0.17%.
- 26 November: the BCCR’s next rate decision, after the hold at 3.00% on 24 September.
What is not known
- Whether the BCCR will cut the policy rate again. The 24 September hold was a 5 to 2 vote, with two members favouring a cut.
- Whether September’s weaker colón will last or fade.
- How much US tariffs and oil prices will cut 2026 growth.
- A full-year debt figure for 2026. The ratio can move with the exchange rate and nominal GDP.
Frequently Asked Questions
How fast is Costa Rica’s economy growing in 2026?
The BCCR forecasts 3.4% growth in 2026 and 3.5% in 2027 (published 30 July 2026). The IMF forecast is 3.6% for 2026. Growth was 4.6% in 2025, according to the IMF.
What is Costa Rica’s inflation rate?
Annual inflation was minus 0.17% in August 2026, according to INEC. Annual prices have fallen for 16 months in a row. The central bank’s target is 3%, with a tolerance of one point either side.
What is the central bank’s interest rate?
The BCCR cut its policy rate (TPM) from 3.25% to 3.00% in July 2026 and held it at 3.00% on 24 September. The next meeting is on 26 November.
What is the colón to dollar exchange rate?
On 30 September 2026 the BCCR reference sale rate was ₡458.43 per US$1, with the buy rate at ₡454.26. The colón was stronger in mid-September, at ₡448.21 per US$1 on 17 September.
How high is Costa Rica’s public debt?
Central government debt was about 61% of GDP in mid-2026, according to Hacienda. At the end of 2025 it was 60.4%.
What is the unemployment rate in Costa Rica?
INEC reported 6.7% for the June to August 2026 rolling quarter, compared with 6.0% a year earlier.
Is Costa Rica’s economy safe for foreign investors?
It has a six-year primary surplus, a precautionary IMF credit line of about US$1.5 billion and steady growth. Rising debt, weak tax revenue and US trade policy are the risks. This is not investment advice.
Sources
- Banco Central de Costa Rica, growth forecast of 30 July 2026 and rate decisions: bccr.fi.cr
- International Monetary Fund, Executive Board concludes 2026 Article IV consultation with Costa Rica, 29 May 2026: imf.org
- INEC, consumer price index (August 2026, released 7 September) and Continuous Employment Survey: inec.cr
- Ministerio de Hacienda, fiscal figures, first half of 2026: hacienda.go.cr
- Delfino.cr, Hacienda primary surplus, August 2026: delfino.cr
- Delfino.cr, 40 months below the BCCR tolerance range, September 2026: delfino.cr
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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