Costa Rica

Costa Rica has, in many ways, been a development success story. An OECD member since 2021, the country 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.

These achievements provide a strong foundation for addressing the country's remaining development challenges. Although national poverty fell to 15.2 percent, inequality remains high, with a Gini index of 48.8 in 2025. 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: Oct 6, 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, 1.7 and 5.2 percentage points lower than in 2022.

Costa Rica has experienced deflation in recent years, driven by falling fuel prices and the appreciation of the colón. Inflation is expected to remain at -0.4 percent in 2026, below the target range of 2 to 4 percent, and it is projected to return to the target range by the first half of 2027 as the pass-through of fuel price hikes materializes.

On the fiscal front, the country has continued to make gradual progress in reducing the deficit through prudent management. The central government deficit decreased 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: October 6, 2026

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Costa Rica and the World Bank Group have built a strong partnership to support inclusive growth, human capital, resilience to climate and disaster risks, and private sector development.

As of September 30, 2026, the active portfolio totals US$1.52 billion across nine operations: five investment projects amounting to US$740.6 million focused on the digitalization of key government services and processes, resilient infrastructure, education, low-carbon initiatives, and greater Indigenous Peoples' participation in forest conservation; three development policy loans, including two Deferred Drawdown Option (DDO) operations (US$360 million) and one regular budget support loan (US$300 million); and a US$120 million Program-for-Results (PforR) operation to promote sustainable and competitive agriculture.

As of August 31, 2026, IFC maintains a US$406 million portfolio in Costa Rica focused on expanding access to finance for women-led businesses, promoting green investments, strengthening the medical technology sector and improving access to medicines, as well as expanding trade finance and supporting public-private partnerships.

The partnership has delivered significant results. In risk management, the institutional framework now requires all new public investments to comply with international best practices and include hazard assessments. In public policy, reforms supported through the Fiscal Management and Decarbonization development policy loan series have strengthened the sustainability of public finances, contributing to recent improvements in the country's sovereign credit rating. In health, 43% of patients with type 2 diabetes are under optimal control, and 90% of primary healthcare facilities use the Unique Digital Health Record. In education, undergraduate enrollment at public universities exceeded 102,000 students, while graduate enrollment surpassed 7,000 students.

In addition, 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: October 6, 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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