Costa Rica, Central America’s second-biggest economy, will recover this year from its first recession in 27 years as exports, tourism and foreign investment rise, central bank President Francisco de Paula Gutierrez said.
The $29.4 billion economy will grow 3.2 percent this year after an estimated 1.3 percent contraction in 2009, Gutierrez, 60, said in an interview at his office in San Jose.
“Much of last year’s contraction was caused by a heavy fall in trade, and we’re already seeing dynamic exports yanking us out of recession,” Gutierrez said. “Our economy is enormously interdependent with the world’s.”
The economy suffered last year from a 9 percent drop in exports to $8.7 billion, according to government trade agency Procomer. President-elect Laura Chinchilla takes office in May having vowed to bolster economic growth by deepening trade with China and boosting public spending. She will have to be careful not to run up an already “unsustainable” fiscal gap, Gutierrez said.
The budget deficit grew to 4.3 percent of gross domestic product last year from a gap of 0.4 percent of GDP in 2008 and a surplus of 0.8 percent in 2007, Gutierrez said.
The central bank’s goal of keeping inflation below 6 percent this year will be a “challenge” after prices rose 1.6 percent in January from the previous month, Gutierrez said. Last year’s 4.1 percent inflation rate was the lowest in 38 years, though still Central America’s highest, Gutierrez said.
Foreign investment will grow 2 percent this year after dropping 35 percent to $1.3 billion last year, Gutierrez said.