The International Monetary Fund expects Costa Rica’s economy to slow in 2026, even as our country remains on solid footing compared with much of the region. The IMF now projects Costa Rica’s real GDP growth at 3.6% this year, down from 4.6% in 2025. The forecast is not a warning of recession, but it does mark a cooler outlook for a country that has spent the last several years benefiting from strong exports, foreign investment, and a powerful free-zone sector.
For expats, investors and anyone watching the colón, the report is worth paying attention to. A slower economy can affect hiring, business confidence, tourism demand, interest-rate decisions and the exchange rate, even when the broader picture remains stable.
The IMF said Costa Rica’s 2025 growth was driven largely by goods exports, especially from companies operating in free trade zones. Those sectors have helped support foreign direct investment and international reserves, giving the country more room to absorb external pressure.
The problem is that 2026 brings a tougher global backdrop. The IMF pointed to higher oil prices, tariffs, trade uncertainty and the wider economic fallout from the war in the Middle East as factors expected to weigh on growth. Those pressures are expected to offset part of the positive effect from continued investment and export activity.
The fund also flagged several risks that could hurt the outlook further, including rising geopolitical tensions, greater protectionism, disruptions to trade, tighter global financial conditions and worsening crime inside Costa Rica.
The crime warning is especially relevant for our tourism-dependent economy. Tourism, real estate, hospitality and foreign investment depend heavily on our country’s image as safe, stable and predictable. Any erosion in that reputation can affect spending decisions long before it appears in official growth data.
The report also comes at a sensitive moment for the colón. The dollar has been trading in the mid-₡450s on Monex in recent days, keeping pressure on exporters, tourism operators and retirees or remote workers who earn in dollars but spend in colones. A strong colón makes imported goods cheaper, but it also reduces the local value of dollar income.
The IMF did not issue an exchange-rate forecast. It did, however, repeat that Costa Rica should maintain exchange-rate flexibility and limit Central Bank intervention to disorderly market conditions. That is a clear signal that the exchange rate should continue to move with market forces unless volatility becomes a bigger problem.
Inflation remains another unusual piece of the economic picture. Costa Rica has spent months in deflation, with consumer prices below the Central Bank’s target range. The IMF expects inflation to return to the Central Bank’s 2% to 4% tolerance band within the next eight quarters, although that path depends heavily on global commodity prices, especially oil.
For us consumers, that means the recent period of falling or flat prices may not last. For borrowers and businesses, it also matters because inflation will influence how much room the Central Bank has to lower interest rates. The IMF said monetary policy should remain cautious and data-based, while leaving the door open to rate cuts if needed to keep inflation expectations aligned with the target.
Costa Rica’s public finances also remain under watch. The IMF said the central government’s primary surplus fell to 0.9% of GDP in 2025, while central government debt rose to 60.4% of GDP by the end of the year. The fund urged Costa Rica to keep its fiscal rule, rebuild buffers and make room for spending on infrastructure, education, security, health and targeted social programs.
At the same time, the IMF maintained Costa Rica’s access to a precautionary Flexible Credit Line of about $1.5 billion. That facility is available to countries with strong policy frameworks and is treated by Costa Rican authorities as a financial backstop, not money they plan to draw immediately.
The broader message is mixed but thankfully, not alarming. Costa Rica is still expected to grow, inflation remains low, reserves are strong, and foreign investment continues to support the economy. But the IMF is making clear that the easy part of the recovery is over.
In the end or to sum it up, Costa Rica is not facing a crisis… yet, but 2026 looks less forgiving. Growth is still slowing, outside shocks are harder to ignore, and the strong colón remains one of the biggest day-to-day economic issues for anyone earning in dollars.
