• Costa Rica Real Estate

Pessimism prevails in Costa Rica’s business sector for 2015

December 16, 2014

The optimism that followed the inauguration of President Luis Guillermo Solís last May has since dissipated among the country’s business sector, according to the latest study by consulting firm Deloitte, released Monday.

Back then, a Deloitte study showed that only 23.8 percent of employers who were surveyed believed the country’s economic situation would worsen within a year. Now, 45.2 percent believe it will, an increase of more than 20 percent.

The results were published in Deloitte’s “Ninth Business Barometer,” a survey of Costa Rica’s 137 top executives conducted in October and November.

The number of entrepreneurs who believe the economy is better now than it was a year ago also dropped, from 16.3 percent to 14.8 percent. The percentage of those who said the economy has remained the same decreased from 59.9 percent to 52.6 percent.

The results are similar to those reported in late November by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP) in a quarterly business confidence rating that dropped from 6.2 to 5.9. The rating measured expectations for the fourth quarter of this year compared with the same period in 2013.

At the time, UCCAEP President Ronald Jiménez said they were concerned about the loss of confidence in the sector, “because without confidence there’s no investment, and without additional investment it will be impossible to create the jobs this country needs.”

Solís’ approval rating among the business sector also is low, with nearly half of those surveyed (45 percent) saying they disapprove of his performance. Only 16 percent of those surveyed said they approve of his handling of the economy.

Deloitte’s findings also are consistent with concerns expressed by the private sector following the president’s lifting of a veto on a labor reform bill last Friday. That announcement generated a flurry of criticism from business groups who argued that the move would worsen the country’s foreign investment climate.

Costa Rica Chamber of Commerce President Francisco Llobet the same day said in a statement that “the country’s situation will worsen because the government’s decision will increase instability for the business sector.”

Deloitte’s study found increasingly negative views regarding the country’s investment climate. Nearly 57 percent of those surveyed said it is worse than a year ago, an increase of 11.5 percent over May’s figures. That number is the highest in the past two years.

Deloitte’s Alan Saborío said the results clearly reveal a negative outlook for next year.

He said: “Hopefully the new year will bring calm and the wisdom to leverage our strengths and the best of our traditions, [as well as] to sit down and talk about how to set a proper course that allows us to regain optimism.”

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