Costa Rica is a development success story in many respects. An upper middle-income country, Costa Rica has experienced steady economic expansion over the past 25 or so years. The post-1980s economic growth is the product of a strategy of outward-oriented, export-led growth, openness to foreign investment; and gradual trade liberalization.

The economy grew at an annual average rate of 5% throughout the 1990s and generally outpaced the average growth rate for the region in the current millennium.

Although Costa Rica was able to press the poverty rate down from 20.2% in 2006 to 18.5% in 2009, for 2010 and 2011 the average percentage of people living in poverty increased to 21.3 and 21.6, respectively.

Extreme poverty also decreased from 5.3 in 2006 to 3.5% in 2008, in line with the relatively high levels of growth and effective social transfer mechanisms. But, it increased to 6.0 in 2010, and 6.4 in 2011, as growth largely benefited skilled labor, and secondary education presented lags, especially among Costa Rica’s poor.

By 2010, Inequality also rose.The Gini coefficient went from 0.439 in 2009 to 0.434 in 2010.  

GDP growth reached a peak of 8.8% in 2006 and maintained a healthy pace in 2007. As a consequence of the global financial crisis in 2008 the country’s economy registered a decline of 1.3% of GDP in 2009. In response, the Government increased its spending in social and labor-intensive infrastructure, helping the economy recuperate to a 5.0% GDP in 2010, and 4.4% in 2011

The Costa Rican economy registered a GDP of 3.4% in 2013, compared to 5.1% in 2012. Current projections foresee a GDP growth between 4.3. and 4.1% over the next few years, driven by private consumption and domestic investment.

As the country faces rising levels of crime, the Government has prioritized citizen security by promoting initiatives to prevent violence and reinforcing activities to combat drug trading.

Costa Rica’s other medium-term challenges are associated with the efforts needed to continue to improve competitiveness and the business climate.

Last Updated: Apr 09, 2014

The World Bank and the Government of Costa Rica developed the Country Partnership Strategy (CPS) for 2012-2015 to strengthen the World Bank-Costa Rica relationship.

This CPS is the third strategy to be prepared for Costa Rica following a period of limited Bank engagement.

The preceding Country Partnership Strategies established a framework for a closer partnership between the World Bank Group and Costa Rica based on mutual learning and knowledge sharing.

The new 2012-2015 CPS is characterized by a results oriented approach and is built around three clusters which are closely aligned with the Government’s strategic view and investment program:

  • Developing competitiveness, including strengthening human capital and skills development, logistics, private sector involvement in infrastructure and improvements in the quality of the business environment.
  • Improving efficiency and equity in social sectors, including expanding access to poor populations in rural communities and introducing best practices in health care delivery, and
  • Supporting environment and disaster management, helping the country’s efforts to consolidate its position as a global leader in the environment and strengthen its disaster management institutions.

The World Bank’s current portfolio in Costa Rica consists of four investment projects (totaling US$377.5 million); and 13 initiatives financed by trust funds amounting to US$17.5 million.

Active projects in Costa Rica are:

Higher Education Project: The objective of this investment operation is to increase equitable access and improve the quality and relevance of the public higher education system in Costa Rica. The Project will help four public universities increase access by investing in infrastructure for teaching, learning and research and increase the quality of academic programs by fostering evaluation and accreditation.

Mainstreaming Market-Based Instruments for Environmental Management: This project enhances the provision of environmental services significant at the national and global levels, and secures their long-term sustainability through a scaled-up payment for environmental services system in Costa Rica.

Catastrophe Deferred Draw Down Option (CAT DDO): The project provides a source of immediate liquidity in case of a natural disaster. It also complements other instruments in the country and provide a source of bridge financing while other sources are being mobilized following a natural disaster.

Port-City of Limon Integrated Infrastructure Project: This project aims to revitalize the city of Limon by investing in urban upgrade, cultural heritage protection; supporting the generation of new sources of employment and income; providing technical assistance for the Municipality to improve its capacity to deliver and manage quality services and goods; and supporting improvement of transport access, constructions and technical assistance to the Limon and Moin port terminals.

Last Updated: Apr 09, 2014

Ecomarkets II Project: This project increased forest conservation in Costa Rica by supporting the development of markets and private sector providers for environmental services supplied by privately owned forests.

More than 130,000 hectares of land were contracted as conservation easements in priority Mesoamerican Biological Corridor areas in Costa Rica. Also, indigenous-community-owned lands in the Payment for Environmental Services program increased from 2,850 hectares in 2000 to 27,638 hectares in 2006, a 970% increase.

A total of 321,325 hectares of land in Costa Rica are generating environmental services, and the number of small and medium-sized landholders participating in the Payment for Environmental Services program has increased from 1,900 in 2006 to 3,730 in 2011 (surpassing the original target of a 50% increase).

Equity and Efficiency of Education: Aiming to improve education in terms of access, quality, completion, and equity, this project helped build 75 schools and 230 classrooms and provided scholarships for 184,000 students, as well as transportation to schools for almost 100,000 beneficiaries.

Last Updated: Apr 09, 2014


Costa Rica: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments