Costa Rica: 2025 Article IV Consultation — Press Release; Staff Report; and Statement by the Executive Director for Costa Rica

IMF Staff Country Reports, May 13, 2025

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Costa Rica: 2025 Article IV Consultation — Press Release; Staff Report; and Statement by the Executive Director for Costa Rica

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Bibliographic details

• Published: May 13, 2025
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798229011327.002

Overview

• Costa Rica has achieved remarkable economic progress driven by very strong fundamentals, policies, and policy frameworks.
• The progress is expected to support robust growth going forward notwithstanding external headwinds.
• The near-term economic outlook is expected to remain favorable.
• Institutionalizing progress made under IMF-supported reform programs is important to sustain long-run growth and raise living standards.

Monetary Policy and Inflation

• The Banco Central de Costa Rica’s (BCCR’s) forward-looking, data-dependent approach to monetary policy has effectively anchored inflation and inflation expectations.
• There is scope to further cut the policy rate if inflation outturns run below the expected steady convergence to the BCCR’s 3 percent target.

Supply-Side Reforms and Labor Market

• Supply-side reforms are needed to sustain impressive economic performance and address growth bottlenecks.
• Priorities include:
  • Narrowing skill mismatches.
  • Reducing labor market informality.
  • Strengthening social assistance.

Climate Resilience and Finance

• Building on progress under the Resilience and Sustainability Facility, efforts are underway to further advance climate-resilience and catalyze climate finance.

Policy Recommendations and Priorities

• Further institutionalize reforms achieved under IMF-supported programs to secure long-term growth and higher living standards.
• Maintain BCCR’s data-dependent monetary strategy and consider policy rate reductions conditional on inflation developments relative to the 3 percent target.
• Implement supply-side reforms to alleviate bottlenecks: focus on skills, formalization, and social assistance.
• Advance climate-resilience measures and mobilize climate finance building on the Resilience and Sustainability Facility.

Source: Costa Rica: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Costa Rica

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