Economic Growth Surpasses Expectations

Despite the Central Bank’s predictions of 3.6% growth for 2006, Costa Rica’s economy grew 6.8% in the first three months of the year compared to the same period in 2005.

Agricultural and free-zone exports – particularly electronics and medical equipment – as well as a booming telecommunications sector, are the primary reasons for the increase, according to the daily La Nación.

Economist José Luis Arce told the daily that the 22% increase in exports during the first trimester increases internal demand for goods and services, and that other factors have increased growth, such as the start of President Oscar Arias’ administration in May, which generated optimism in consumers and business leaders.

Consumer confidence surveys support Arce’s assertions: a survey by the University of Costa Rica’s Opinion Studies Center showed consumer confidence levels of 45.7% for April, the daily reported, up from 33.9% in November 2005, while the Central Bank’s investment confidence survey showed an increase from 38.9% at the end of last year to 53.8% in March.