The economy of Costa Rica heavily depends on tourism, agriculture, and electronics exports. Poverty has been reduced over the past 15 years, and a social safety net put into place. According to the CIA World Factbook, Costa Rica's GDP per capita is US$10,900 (2009); however, there is a lack of maintenance and new investment in infrastructure, 21.3% of the people living below the poverty line and 7.8% (2009) unemployed. The Costa Rican economy grew nearly 5% in 2006 after experiencing 4 years of slow economic growth.
Inflation rose to 22.5% in 1995, dropped to 11.1% in 1997, 12% in 1998, 11% in 1999 and 13% in 2008. Measures taken by the Central Bank have reduced inflation substantially to 4.3% in 2009, and a projected 5.8% for 2010. Curbing inflation, reducing the deficit, and improving public sector efficiency through an anti-corruption drive, remain key challenges to the government. Previous political resistance to privatization had stalled liberalization efforts. However, after the signing of CAFTA, Costa Rica is now opened to competition in its insurance and telecommunications markets.
Costa Rica's economy emerged from recession in 1997 and has shown strong aggregate growth since then. After 6.2% growth in 1997, GDP grew a substantial 8.3% in 1999, led by exports.
The strength in the nontraditional export and tourism sector is masking a relatively lackluster performance by traditional sectors, including agriculture. The central government deficit decreased to 3.2% of GDP in 1999, down from 3.3% from the year before. On a consolidated basis, including Central Bank losses and parastatal enterprise profits, the public sector deficit was 2.3% of GDP.
Controlling the budget deficit remains the single biggest challenge for the country's economic policy makers, as interest costs on the accumulated central government debt consumes the equivalent of 30% of the government's total revenues. This limits the resources available for investments in the country's deteriorated public infrastructure, investments in many cases that would result in higher quality infrastructure if they were better planned.
Read more about Economy Of Costa Rica: Natural Resources, Tourism, Exports, Jobs, and Energy, Infrastructure, Trade Policy, Statistics
Famous quotes containing the words economy of and/or economy:
“Even the poor student studies and is taught only political economy, while that economy of living which is synonymous with philosophy is not even sincerely professed in our colleges. The consequence is, that while he is reading Adam Smith, Ricardo, and Say, he runs his father in debt irretrievably.”
—Henry David Thoreau (1817–1862)
“Everyone is always in favour of general economy and particular expenditure.”
—Anthony, Sir Eden (1897–1977)