Country Report Costa Rica
| Publication Date | May 2008 |
|---|---|
| Publisher | EIU |
| Product Type | Report |
| Pages | 21 |
| ISBN Number | not applicable |
| Product Code | EIU00006 |
Summary
Outlook for 2008-09
- The government will focus on passing the laws required to bring the Dominican Republic-Central American Free-Trade Agreement (DR-CAFTA) into effect and is confident this can be done well before the October deadline.
- Negotiations will continue with other Central American countries to form a Central American customs union, which will then seek a free-trade agreement (FTA) with the EU. Talks with the EU have already started.
- A long-awaited fiscal reform will be a priority in the second half of 2008 and although the Economist Intelligence Unit expects it to be passed, there is a significant risk that it will be further delayed, or will be diluted.
- We are now assuming that the US recovery in 2009 will be slower than previously forecast, leading us to make a downward revision to our growth forecast for 2009: the US typically accounts for 35-40% of Costa Rican exports.
- The government will focus on passing the laws required to bring the Dominican Republic-Central American Free-Trade Agreement (DR-CAFTA) into effect and is confident this can be done well before the October deadline.
- Negotiations will continue with other Central American countries to form a Central American customs union, which will then seek a free-trade agreement (FTA) with the EU. Talks with the EU have already started.
- A long-awaited fiscal reform will be a priority in the second half of 2008 and although the Economist Intelligence Unit expects it to be passed, there is a significant risk that it will be further delayed, or will be diluted.
- We are now assuming that the US recovery in 2009 will be slower than previously forecast, leading us to make a downward revision to our growth forecast for 2009: the US typically accounts for 35-40% of Costa Rican exports.
Monthly review
- A national security crisis that arose in March has begun to calm down, although analysis of the situation is continuing and the government is considering establishing an extradition treaty with Colombia.
- More progress has been made with the DR-CAFTA implementation laws and the government is confident that they can be passed by July.
- Early implementation would allow the DR-CAFTA treaty to come into effect before trade preferences under the Caribbean Basin Initiative expire in October.
- Talks with the EU are moving slowly, with little progress on issues of concern over trade and politics.
- The monetary authorities are continuing to monitor inflation which, as in most countries in the region, has risen this year, largely because of high international fuel and soft commodity prices.
- The system of exchange-rate bands that the Central Bank uses is encouraging inflows of speculative capital, complicating policy.
- Trade statistics suggest that the US slowdown had little effect on export earnings in early 2008, but a fall in imports of industrial inputs indicates that orders for re-export products have started to fall away.
- A national security crisis that arose in March has begun to calm down, although analysis of the situation is continuing and the government is considering establishing an extradition treaty with Colombia.
- More progress has been made with the DR-CAFTA implementation laws and the government is confident that they can be passed by July.
- Early implementation would allow the DR-CAFTA treaty to come into effect before trade preferences under the Caribbean Basin Initiative expire in October.
- Talks with the EU are moving slowly, with little progress on issues of concern over trade and politics.
- The monetary authorities are continuing to monitor inflation which, as in most countries in the region, has risen this year, largely because of high international fuel and soft commodity prices.
- The system of exchange-rate bands that the Central Bank uses is encouraging inflows of speculative capital, complicating policy.
- Trade statistics suggest that the US slowdown had little effect on export earnings in early 2008, but a fall in imports of industrial inputs indicates that orders for re-export products have started to fall away.
SOURCE: Country Report
Content
- Highlights
- Outlook for 2008-09: Domestic politics
- Outlook for 2008-09: International relations
- Outlook for 2008-09: Policy trends
- Outlook for 2008-09: Fiscal policy
- Outlook for 2008-09: Monetary policy
- Outlook for 2008-09: International assumptions
- Outlook for 2008-09: Economic growth
- Outlook for 2008-09: Inflation
- Outlook for 2008-09: Exchange rates
- Outlook for 2008-09: External sector
- Outlook for 2008-09: Forecast summary
- The political scene: Security crisis eases, but talks continue
- The political scene: More progress in DR-CAFTA implementation laws
- The political scene: The government looks to amend other legislation
- The political scene: Talks with the EU move along with difficulty
- Economic policy: Monetary policy is complicating inflation
- Economic performance: Import growth outpaces that of exports
- Data and charts: Annual data and forecast
- Data and charts: Quarterly data
- Data and charts: Monthly data
- Data and charts: Annual trends charts
- Data and charts: Monthly trends charts
- Political structure
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