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Analysis by Region - Emerging Markets - Costa Rica

Publisher Oxford Economics
Published Jun 30, 2026
Length 9 Pages
SKU # OFE21421633

Description

Key changes: We’ve raised our 2026 fiscal deficit forecast by 0.9ppts to 4.4% of GDP and have lowered our primary balance forecast by 0.5ppts to 0.2%. Although current expenditure remains broadly in line with targets, revenue performance – particularly tax revenue collection – has fallen short of expectations. Slower nominal GDP growth, driven by deflationary pressures, alongside the sustained strength of the colón, will likely continue weighing on revenue growth, limiting the scope for a near-term improvement. In addition, we now expect higher interest payments to further strain public finances. As a result, we forecast the overall deficit will widen slightly to 4.5% of GDP next year, with the primary balance deteriorating to around 0%.

Table of Contents

9 Pages
Costa Rica: Rising debt highlights the need for further fiscal measures
Baseline forecast
Recent developments
Short-term forecast
Policy assumptions
Key drivers of short-term forecast
What to watch out for
Economic risk
Economic risk evaluation

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