{
  "title": "Costa Rica: Selected Issues",
  "publication": "IMF Staff Country Reports, December 22, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/12/22/costa-rica-selected-issues-542918",
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  "summary": "This Selected Issues paper focuses on the neutral interest rate in Costa Rica. Estimates of Costa Rica’s real natural rate of interest are between 0 and 3 percent, with a suite of semistructural and univariate methods reaffirming this conclusion at close to 1 percent.",
  "sections": [
    {
      "heading": "Main findings",
      "content": "- Estimates of Costa Rica’s real natural rate of interest are between 0 and 3 percent.\n- A suite of semistructural and univariate methods reaffirms a central estimate close to 1 percent.\n- Univariate estimates for Costa Rica lie between those for the United States and the largest regional peers.\n- 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.\n- Brazil and Mexico currently appear to have neutral rates above 2 percent but above the United States.\n- Structural changes to the Costa Rican economy, particularly in recent years, have important implications for movement in the neutral rate."
    },
    {
      "heading": "Methods and evidence",
      "content": "- Multiple differing methods were applied, including semistructural and univariate approaches, to account for characteristics of the Costa Rican economy.\n- The toolkit of methods consistently indicates that current monetary policy remains restrictive."
    },
    {
      "heading": "Implications for monetary policy",
      "content": "- 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.\n- Comparisons with regional peers (Brazil and Mexico) and the United States provide a benchmark for interpreting Costa Rica’s neutral rate and policy stance.\n\nInternational Monetary Fund. \"Costa Rica: Selected Issues\", IMF Staff Country Reports No. 2023/443, December 22, 2023.\n\n---\n\n Content in this bundle\n\n- Costa Rica: Selected Issues; IMF Country Report No. 23/443; December 6, 2023\n  - Costa Rica: Selected Issues; IMF Country Report No. 23/443; December 6, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Costa Rica: Selected Issues; IMF Country Report No. 23/443; December 6, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: December 22, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400264924.002",
    "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.",
    "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.",
    "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.",
    "**Costa Rica: Selected Issues; IMF Country Report No. 23/443; December 6, 2023**"
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