The recovery process of the Costa Rican economy continues firm. Economic activity grew at double-digit rates for the sixth consecutive month compared to the previous year, although its dynamism moderated.
In October 2021, the IMAE cycle trend series grew 10.0% in year-on-year terms, in contrast to the 5.7% drop in the same month of the previous year. In addition, production increased 7.3% on average from January to October 2021, compared to the same period of the previous year.
The evolution of the series adjusted for seasonality suggests that the vigor of economic growth is moderating. The annualized quarterly variation of this indicator went from 10.4% in September to 6.4% in October.
Most of the economic activities recovered their pre-pandemic production levels:
The robust growth of manufacturing activity and the greater demand for information and communication services made it possible for these industries to recover their pre-pandemic production levels since the end of 2020. In October 2021, they presented higher levels of 14.6% and 7.7% to those observed in February of the previous year.
However, some activities still show production levels below the pre-pandemic. In particular:
- Hotel and restaurant services (-23.7% in relation to pre-pandemic levels), whose demand depends highly both on the mobility of internal consumers and the influx of tourists from abroad.
- Public administration services (-5.1%), due to efforts to contain the Government’s current primary spending.
- Construction (-3.8%), mainly due to execution problems that affect public investment (see details below).
If the interannual growth in October is considered (and not with respect to the level of economic activity before the pandemic), the greatest contribution to the recovery comes from the dynamism of manufacturing, hotels and restaurants, and transportation services and storage.
Manufacturing grew in year-on-year terms for the seventh month at double-digit rates, mainly due to external demand for medical devices. Hotel and restaurant services registered an interannual variation of 66.0%. This growth is influenced by a base effect, since in the same month of the previous year the activity registered a contraction of 51.6%. The greater mobility of the population and the increase in the international flow of goods, explains the growth in transport activity.