• Costa Rica Real Estate

Costa Rica exports down 16 percent in first six months of 2015; ‘Intel effect’ continues

July 24, 2015

Total exports of Costa Rican goods fell by 16 percent in the first half of the year over the same period in 2014, Foreign Trade (COMEX) Minister Alexander Mora Delgado reported Friday.

The total value of export products in the past six months reached $4.9 billion, representing 48.5 percent of COMEX’s target for 2015, set at $10.2 billion.

COMEX’s analysis notes that the drop in exports can be attributed mostly to the closure of Intel’s chip manufacturing plant last year, as well as weather conditions that affected, among other crops, pineapples and bananas.

What’s become known as the “Intel effect” prevents Costa Rica’s export figures from showing positive growth figures. But when electronic components are excluded, the country’s total exports actually grew 1.3 percent over the previous six months.

Regarding losses in the agricultural sector, Mora said the drought in Guanacaste and flooding in Limón — both of which he attributed to a changing climate — caused losses of $250 million in pineapple, banana and other crops.

Export sectors showing the most notable growth were medical devices, up 35 percent, coffee, up 21 percent, medicines, up 12 percent and diapers, up 5 percent.

On the other side, products that recorded a drop in sales in the past six months include bananas, pineapples, electric cables, textiles and milk.

Costa Rica’s Central Bank (BCCR) confirmed last month that the decrease in export figures is being driven mainly by Intel’s exit.

“The manufacturing industry recorded an annual fall of 3.0 percent due to the relocation of Intel’s operations to the Asian market,” reads BCCR’s analysis on Production, Employment and Wages from June. BCCR analysts believe that the “Intel effect” will decrease during the last quarter of 2015.

Tico products went to 141 different markets during the first six months of this year, but the main destinations were the United States, Panama, Nicaragua, Guatemala and the Netherlands, COMEX noted.

Service Exports Also Grew

The COMEX report also states that exports of services in the 12 months between April 2014 and March 2015 reached a total of $6.4 billion, up 14.8 percent over the average figures recorded in the same three previous periods.

Tourism, computer and information, and business services comprise the majority of service exports. The sector has maintained a sustained growth trend over the last four years, according to COMEX records.

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