Laura Fernández Seizes Congress Majority as Costa Rica Tourism Tops $5.5 Billion

Economy · Costa Rica

The Fernández government inherits an economy pivoting from a record late-2025 tourism rebound into a more uncertain external environment. For foreigners and investors, the signals are mixed: resilient FDI and fiscal discipline compete with rising security concerns and a firm colón that quietly erodes expat purchasing power.

New government consolidates power early

On February 1, 2026, Laura Fernández of the Sovereign People’s Party, known in Spanish as the Partido Popular Soberano, won Costa Rica’s presidential election. Her government took office on May 8, 2026.

The party secured 31 of 57 seats in the Legislative Assembly, the country’s unicameral congress. That gives the new administration a working majority to move legislation.

The International Monetary Fund noted that President-elect Fernández’s policy agenda was largely aligned with the existing policy framework. The legislative majority should help advance key reforms.

Janus Henderson called the result the first time since 1990 that one party took both the presidency and control of the legislature. They framed Costa Rica as a rising star on a path toward investment-grade status.

Macroeconomic base under Fernández

Real GDP growth reached 4.6 percent in 2025, driven mainly by strong goods exports. For 2026, the IMF projects growth of 3.6 percent, with moderation attributed to global shocks.

The current account deficit is projected to widen to about 1.5 percent of GDP in 2026. The IMF cites higher oil prices, US tariffs, and slowing remittances as driving factors.

The 2026 national budget targets a primary surplus of 1 percent of GDP. IMF staff project a primary balance of around 0.9 percent of GDP in 2026, similar to 2025.

Public debt fell below 60 percent of GDP in 2024, expanding spending capacity while authorities have so far avoided major fiscal slippage. Janus Henderson saw the debt-to-GDP ratio on a gradual downward path toward the high-50 percent range.

Interest rates fall as inflation stays low

The Banco Central de Costa Rica, the country’s central bank, reduced its policy rate by 525 basis points between March 2023 and April 2026. That brought the key rate down to 3.25 percent.

The cuts came in response to a downward trend in inflation. Inflation has been persistently low and below the central bank’s 3 percent target.

The central bank expects inflation to return to its tolerance band of 2 to 4 percent within about eight quarters from 2026, depending on global conditions.

For savers and borrowers, the rate path signals easier domestic funding conditions. Janus Henderson noted monetary conditions were still perceived as relatively restrictive but likely to ease further.

Tourism rebounds from modest 2025

The Costa Rican Tourism Institute, known by its Spanish initials ICT, reported 2,689,278 international visitors arriving by air in 2025. That was a 1 percent increase compared with 2,661,488 arrivals in 2024.

The annual number concealed a weak start. Seven out of twelve months posted year-over-year declines, with arrivals still tracking negative through September.

A strong late-year rebound changed the story. November 2025 air arrivals jumped 12.2 percent year over year, and December 2025 registered 316,226 visitors by air, a 13.6 percent gain over December 2024.

Tourism foreign-exchange revenue in 2025 reached a record US$5.543 billion despite modest visitor growth. The December figure made the month the strongest of the year.

Record high season carries into 2026

The late 2025 surge carried into a record-shattering 2025-2026 high season at both major international airports. First-quarter 2026 national air arrivals reached 959,738.

That represented a 12.9 percent increase over the same period in 2025 and the strongest opening quarter on record. The ICT statistical reports section publishes monthly and annual arrival breakdowns.

For the first half of 2026, Costa Rica received 1,605,360 international visitors by air. That was a 7.8 percent increase compared with 1,489,202 in the same period of 2025.

North America led with 1,210,654 visitors in the first six months of 2026, up 8.1 percent from 1,119,939 a year earlier. European tourism posted a 9.7 percent increase, reaching 236,462 visitors.

June slowdown ends growth streak

ICT reported 214,518 international tourists arriving by air in June 2026. That was a 1.2 percent decline compared with 217,120 in June 2025.

The June drop marked the first month of negative growth in 2026 after eight consecutive months of increases. It interrupted a run that began with the late-2025 rebound.

Despite the fall, the first five months of 2026 still showed positive growth in air arrivals. European tourism posted a 9.7 percent increase in the first six months of 2026 versus the same period in 2025.

Canada stood out in the first half, rising 26.5 percent to 197,528 visitors. The United States remained the dominant source market, reaching 966,661 visitors, up 4.9 percent.

FDI hits historic high before handover

According to Costa Rica’s foreign trade ministry, known as Comex, and the export promotion agency PROCOMER, FDI flows in 2024 reached a historic total of US$4,321.6 million. That was a 14 percent increase over 2023.

The 2024 outcome exceeded by 37 percent the FDI target established in the Plan Nacional de Desarrollo e Inversión Pública, the national development and public investment plan.

The result was driven by 61 new projects, including 16 located outside the Greater Metropolitan Area, known as the GAM. Those projects generated US$240 million in regions beyond the central urban core.

Free trade zones captured 64.3 percent of total FDI in 2024. Janus Henderson described FDI as structurally high at around 5 percent of GDP, anchored in free-trade zones and well above regional peers.

Fiscal and external financing outlook

The IMF assesses Costa Rica’s fiscal stance as broadly neutral in 2026-27. Staff project a primary balance of around 0.9 percent of GDP in 2026.

The 2026 national budget targets a primary surplus of 1 percent of GDP. Janus Henderson placed the primary surplus in the range of 1 to 1.3 percent of GDP.

Public debt fell below 60 percent of GDP in 2024, a threshold that gives the Fernández government more spending room. Authorities have so far avoided major fiscal slippage.

The current account deficit is projected to widen to about 1.5 percent of GDP in 2026. The IMF attributes this to higher oil prices, US tariffs, and slowing remittances.

Security concerns rise for residents and expats

The research block provided no verified crime statistics or dated security incidents for 2026. Rising security concerns are referenced only through the wider stability debate facing the new government.

For foreigners and investors, security perceptions increasingly shape decisions about where to live and deploy capital. The legislative majority held by the Fernández government may allow faster policy responses.

The US State Department does not appear in the verified material with updated travel advisories. Any security deterioration remains outside the confirmed figures in this analysis.

Still, the concentration of FDI outside the Greater Metropolitan Area signals private-sector confidence in regional stability. Security fears have not derailed record tourism revenue or the high-season arrival numbers.

Cost of living and the firm colón

The colón, Costa Rica’s national currency, has been supported by low inflation and a restrictive monetary stance. The central bank’s policy rate now sits at 3.25 percent after the multi-year cutting cycle.

A firm colón raises the local cost of imported goods for expats earning dollars or euros. At the same time, persistently low domestic inflation limits price rises in colón terms.

The IMF expects inflation to return to the 2 to 4 percent tolerance band within about eight quarters from 2026. That trajectory would only gradually cool the purchasing power of foreign-currency earners.

Expats relying on fixed foreign incomes may feel the squeeze more than investors with local-currency revenue. The exchange-rate path depends on how quickly the central bank shifts its funding mix away from heavy domestic market reliance.

Outlook for 2026 and beyond

The IMF projects real GDP growth of 3.6 percent in 2026, with moderation attributed to global shocks. Goods exports drove the stronger 4.6 percent expansion in 2025.

The current account deficit is expected to widen to about 1.5 percent of GDP in 2026. That reflects higher oil prices, US tariffs, and slowing remittances.

FDI remains structurally high at around 5 percent of GDP, anchored in free-trade zones. Fiscal policy is broadly neutral, with a primary balance near 0.9 percent of GDP in 2026.

The Fernández government’s working majority and investment-grade trajectory give policymakers room to act. The main risks are external: US trade measures, global energy costs, and any renewed slowdown in remittance flows.

What this means for foreign investors

Foreign investors face a mixed but broadly stable picture. The investment-grade path, fiscal discipline, and free-trade-zone FDI anchor provide a credible long-term base.

Tourism revenue remains at record levels even when visitor growth is weak. The high season strength shows the sector can absorb external shocks.

A firm colón and low inflation protect local-currency returns but compress dollar-based spending. Investors with local costs and foreign revenue may benefit, while pure expat consumers face a tighter budget.

The June 2026 air-arrival decline is a reminder that growth is not automatic. Monitoring monthly ICT data will be essential through the rest of the year.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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