In many aspects, Costa Rica is a success story in terms of development. It is considered an upper middle-income country, which has shown a steady economic growth over the past 25 years. This growth resulted from an outward- oriented strategy, based on the openness to foreign investment and gradual trade liberalization.
Costa Rica is also a global leader for its environmental policies and accomplishments, which have helped the country build its Green Trademark. The pioneering Payments for Environmental Services (PES) program has been successful in promoting forest and biodiversity conservation; making Costa Rica the only tropical country in the world that has reversed deforestation.
The combination of political stability, a social compact, and steady growth has resulted in one of the lowest poverty rates in Latin America and the Caribbean.
According to data from the 2017 National Household Survey of the National Institute of Statistics and Census, the percentage of poor households in Costa Rica went from 20.5 to 20 percent between 2016 and 2017, which is not a significant change; while extreme poverty dropped from 6.3 percent to 5.7 percent.
The country’s success over the past decades is also reflected in its sound human development indicators, which have contributed to move the country up the global ranks, higher than the other countries in the region.
Costa Rica’s GDP per capita has tripled since 1960, reaching an average growth of 4.5 percent between 2000 and 2013, compared to the regional average of 3.8 percent for the same period.
During the global crisis, real GDP contracted 1 percent in 2009, but rapidly rebounded following the crisis, reaching one of the highest average real growth rates in Latin America between 2010 and 2016 (4 compared to 2.5 percent regional average). Notwithstanding, growth has slowed down in recent years and it is expected to continue dropping in 2018.
Two pressing development challenges stand out: the deteriorating fiscal situation and persistent inequality. These challenges affect the basic pillars of the Costa Rican development model: inclusion, growth, and sustainability.
The government has strived to address these problems and is committed to an inclusive society that guarantees the welfare of its people, supported by transparent and accountable public institutions.
Last Updated: Oct 04, 2018