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Expected GDP Growth of about 4% Until 2021; Share of New Motor Vehicle Imports to Grow from 68.6% in 2016 to 72.5% by 2021
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This study explores the macroeconomic and automotive outlook for Costa Rica, covering topics such as GDP, monetary policy, national development plans, trade and investment conditions, vehicle import trends and automotive industry developments.Costa Rica is anticipated to achieve robust growth of about 4.0% until 2021, with higher interest rates being a key restraint to growth. Rising fiscal deficits and public debt are a key challenge that the government faces, because of which immediate fiscal consolidation measures are the need of the hour. The government has drawn up the detailed National Development Plan 2015-2018 to track progress across areas such as economic growth and job generation, poverty and inequality, and corruption and government efficiency. The study highlights government targets, achievements, and key trends across each of these areas. Costa Rica has also been invited to join the Organization for Economic Co-operation and Development (OECD), and is currently working on meeting accession requirements. Presently, from the Latin American and Caribbean region, only Mexico and Chile are members.In regards to trade conditions, Costa Rica boasts of significant free trade relations allowing exporters to enjoy the benefits of reduced trade and non-trade barriers in exports markets. The free trade zone regime in Costa Rica, is a key driver of investments and exports in Costa Rica, with eligible companies receiving a plethora of incentives. The study explores eligibility criteria under the regime, key investor incentives, and analyzed how the regime has been helping drive GDP, exports and jobs in Costa Rica.In regards to the automotive industry, with no local vehicle production, Costa Rica is highly reliant on vehicle imports. Trends indicated that the share of used vehicle imports as a share of total vehicle imports has been declining of the years, with the trend expected to continue over the next five years. The study highlight new and used motor vehicle import figures and analyzed key drivers and restraints affecting imports. Moreover, the study also analyzes key industry developments in regards to ongoing and existing automotive related policies. Key Questions Answered:· What is Costa Rica’s growth outlook and the key factors influencing growth?· What type of monetary policy is the central bank seen to be adopting?· What are the key highlights of the 2017 budget?· How is the government looking to reduce fiscal deficits and the debt burden?· What has been Costa Rica’s progress in regards to the National Development Plan 2015-2018 main targets?· How is Costa Rica expected to benefit from OECD membership?· Which are the existing countries/regions Costa Rica has free trade relations with? How could free trade relations evolve in the medium term?· What are some of the key eligibility criteria and investor incentives in regards to the free trade zone regime? · How are used and new motor vehicle import trends expected to evolve in the next five years?· What are some of the key policy developments in regards to the automotive industry?
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