Costa Rica Economic Growth Slows to 2.2% in August

Costa Rica's economy expanded 2.2% in August, slower than the 5.6% growth recorded a year earlier, according to data from the country's central bank. The slowdown was primarily driven by a decline in activity in the free zones, which export medical devices to the United States. These zones grew by just 0.7% in August, down from a robust 16% increase in the same period last year.

The domestic economy, however, showed stronger resilience, expanding by 3.2%, outpacing the 2.7% growth seen in August 2025. The central bank attributes the free zone slowdown to a decline in manufacturing activity, which has been ongoing since late 2025. The closure of electronics component plants, following announcements by US chipmakers Intel and Qorvo to relocate their manufacturing processes to Asia, has significantly impacted the index.

Despite these challenges, the bank anticipates a recovery in the free zones towards the end of 2026, noting that the comparison base from 2025 is currently high and should normalize in the coming months. The steady growth in construction, professional services, retail trade, and financial services offers a more reassuring signal to US investors and the large American retiree community, underlining Costa Rica's commitment to a stable and robust domestic economy.