Economic activities linked to tourism and transport gave the first signs of recovery in Costa Rica last March, after the precipitous fall they registered in the same month of 2020, with the arrival of the COVID-19 Pandemic.
The Monthly Index of Economic Activity, calculated by the Central Bank of Costa Rica, reported a year-on-year growth of 3.9% for March 2021. This is the first positive figure in 12 months, after the blow to the economy that led to the closure of the borders, the limitations on businesses and the vehicle circulation restriction that were imposed a year earlier.
The data as of March is the most recent published by the Central Bank. Updated this past Wednesday night. According to the IMAE cycle trend series, the year-on-year variation in production reached its lowest point in June 2020, at which point a gradual recovery process began.
Of lime and sand
In March 2021, trade registered a year-on-year growth of 2.1%, a better result than the 2.7% decrease reported a year earlier. In the case of hotels and restaurants (linked to tourism) and transport, although they continue to show a year-on-year decrease, the magnitude of the fall is less than that of the same month of 2020. Activities such as manufacturing, professional services and infocommunications registered positive growth rates in March, but lower than those they exhibited in 2020.
Awakening of the “definitive regime”
The result obtained in March is explained to a greater degree by activity in the “definitive regime” (outside free zones), which for the first time in a year marked positive year-on-year growth.
Because it is a year-on-year comparison, the economy in March 2021 shows a better performance than 12 months ago, when it registered a sharp fall as a result of the severe health measures that were implemented at the time.
A long process ahead
This does not mean that the activities are fully recovered. On the other hand, economic activity in the special regimes continues to record double-digit year-on-year growth. For March, the growth of this sector was 13.7% year-on-year.
Although it continues to function as the main engine of the economy, in the last two months the free zone sector has shown a slight slowdown. The best performance for this segment continues to be had by the medical device industry with growth of around 20% year-on-year.