Costa Rica: Selected Issues
IMF Staff Country Reports, December 22, 2023
Source details
- Canonical URL
- Costa Rica: Selected Issues
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Bibliographic details
- Published: December 22, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400264924.002
Main findings
- Estimates of Costa Rica’s real natural rate of interest are between 0 and 3 percent.
- A suite of semistructural and univariate methods reaffirms a central estimate close to 1 percent.
- Univariate estimates for Costa Rica lie between those for the United States and the largest regional peers.
- Replicating the univariate approach for the United States and other countries in Latin America suggests Costa Rica has a somewhat lower neutral real interest rate than the largest regional peers, Brazil and Mexico.
- Brazil and Mexico currently appear to have neutral rates above 2 percent but above the United States.
- Structural changes to the Costa Rican economy, particularly in recent years, have important implications for movement in the neutral rate.
Methods and evidence
- Multiple differing methods were applied, including semistructural and univariate approaches, to account for characteristics of the Costa Rican economy.
- The toolkit of methods consistently indicates that current monetary policy remains restrictive.
Implications for monetary policy
- Given neutral rate estimates between 0 and 3 percent and a central estimate near 1 percent, current monetary policy is assessed as restrictive under the paper’s estimations.
- Comparisons with regional peers (Brazil and Mexico) and the United States provide a benchmark for interpreting Costa Rica’s neutral rate and policy stance.
International Monetary Fund. "Costa Rica: Selected Issues", IMF Staff Country Reports No. 2023/443, December 22, 2023.
Content in this bundle
- Costa Rica: Selected Issues; IMF Country Report No. 23/443; December 6, 2023