Costa Rica

Costa Rica has, in many ways, been a development success story. An OECD member since 2021, it enjoys a long tradition of democratic stability and strong commitment to institutions. Real per capita income grew by an average of 3 percent annually between 2004 and 2024, leading Costa Rica to be classified as a high-income economy in 2025.

Despite these achievements, its development model faces challenges. Although poverty fell to 17.1 percent according to the national poverty line, inequality remains high, with a Gini coefficient of 48.8 in the latest period. While the expansion of free trade zones has been an important driver of growth, gaps persist between this segment and the rest of the economy, with implications for productivity and wages.

Territorial disparities also remain, linked to infrastructure and public service challenges that limit access to better employment opportunities. In addition, female labor force participation remains low, partly due to caregiving responsibilities for older adults in a context of rapid population ageing.

In a global context marked by greater uncertainty, it is crucial for Costa Rica to promote inclusive growth that better integrates its entire workforce and strengthens its capacity to withstand external shocks. Reducing gaps will require improving the regulatory environment for all companies, raising the quality of education spending, and mobilizing greater public and private investment in infrastructure.

Last Updated: Apr 16, 2026

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In a dynamic global environment, Costa Rica has made steady progress in strengthening its macroeconomic fundamentals. Growth accelerated to 4.6 percent in 2025, driven by exports, particularly medical devices and services. Supported by economic activity, the unemployment rate fell to 6.3 percent in the quarter ending in December 2025. Labor force participation and employment rates declined to 54.5 and 51.1 percent, respectively.

Costa Rica has experienced deflation in recent years, driven by falling fuel prices and the appreciation of the colón. Inflation is expected to rebound to an average of 1.0 percent in 2026, remaining below the target range of 2 to 4 percent. However, a more persistent increase in international oil prices could influence price dynamics.

On the fiscal front, the country has continued to make gradual progress in reducing the deficit through prudent management. The central government deficit declined to 3.4 percent of GDP, 0.3 percentage points lower than the previous year, mainly as a result of containment of public spending. Central government debt increased slightly to 60.4 percent of GDP, reflecting a liquidity pre-financing strategy.

Looking ahead, strengthening public finances will depend on improving the efficiency of public spending, enhancing tax collection, and ensuring more predictable and affordable access to external financing.

Last Updated: Apr 16, 2026

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Costa Rica and the World Bank have built a strong partnership to support inclusive growth, human capital development, and resilience to climate and disaster risks. As of April 1, 2026, the active portfolio amounts to US$1,520.6 million across nine operations. Of these, five investment projects represent US$740.6 million and support critical areas such as the digitalization of key government services and processes; the development of resilient infrastructure; education; low-carbon initiatives; and increased participation of Indigenous Peoples in forest conservation.

In addition, the portfolio includes three development policy loans, two with deferred drawdown options (US$360 million, and one regular budget support operation (US$300 million), as well as a US$120 million Program-for-Results (PforR) designed to promote sustainable and competitive agriculture.

The partnership has generated significant results over time. In risk management, the country’s institutional framework requires that all new public investments comply with best practices and include hazard assessments. In public policy, reforms under the Fiscal Management and Decarbonization budget support series have strengthened the sustainability of public finances, contributing to recent improvements in the country’s sovereign credit rating. In health, 43 percent of patients with type II diabetes are under optimal control, and 90 percent of primary health care units have a Single Digital Health Record. In education, undergraduate enrollment in public universities exceeded 102,000 students, and graduate enrollment surpassed 7,000.

Finally, through the Forest Carbon Partnership Facility, Costa Rica received payments for the reduction of 6.62 million tons of CO₂ emissions between 2022 and 2024, totaling US$33.98 million—resources that communities allocate to local projects, infrastructure, and economic opportunities.

Last Updated: Apr 16, 2026

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The Country Partnership Framework (CPF) between the World Bank and the Government of Costa Rica has strengthened a partnership based on mutual learning and knowledge sharing in support of the country’s growth and development objectives. The CPF for 2024–2028 was approved by the World Bank’s Board of Directors on April 30, 2024. and focuses on promoting broad-based, inclusive economic growth; reinforcing and preserving human capital in key sectors such as education and social protection; and enhancing resilience to natural and social shocks and the effects of climate change.

These efforts are underpinned by two cross-cutting themes that guide the strategy’s implementation -- strengthening institutions and enhancing equity and inclusion across all World Bank interventions. This approach takes into consideration Costa Rica’s evolution as a high income and OECD member country.

You can download the CPF here

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