Identifier
Created
Classification
Origin
07SANJOSE298
2007-02-15 17:06:00
UNCLASSIFIED
Embassy San Jose
Cable title:
THE COSTA RICAN ECONOMY IMPROVES DURING 2006
how-toVZCZCXYZ0032 RR RUEHWEB DE RUEHSJ #0298 0461706 ZNR UUUUU ZZH R 151706Z FEB 07 FM AMEMBASSY SAN JOSE TO RUEHC/SECSTATE WASHDC 7245 INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
UNCLAS SAN JOSE 000298
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECONCS
SUBJECT: THE COSTA RICAN ECONOMY IMPROVES DURING 2006
REF: SAN JOSE 213
UNCLAS SAN JOSE 000298
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECONCS
SUBJECT: THE COSTA RICAN ECONOMY IMPROVES DURING 2006
REF: SAN JOSE 213
1. Banco Central de Costa Rica (BCCR) says the country's GDP grew
over 7% in 2006. This is the highest GDP growth rate since 8% in
1999. Inflation for 2006 was 9.4%, 5 percentage points lower than
last year's rate of 14.4%, and the lowest rate in 14 years. While
foreign direct investment flows reached a record $1.4 billion,
surprisingly, the tourism industry reports a disturbing trend of
apparent stagnation.
2. Tourism during 2006 grew by a surprisingly meager 1.8% (See
Reftel). Tourism Minister, Carlos Benevides, explained to local
media that Costa Rica is a 'mature product' attracting a different
type of buyer. In contrast, other key sectors such as agriculture
and free zone manufacturing showed marked improvement. In 2006 FDI
flows doubled from the $861 million level registered in 2005.
According to Minister Benevides, real estate investment for tourism
development along the Pacific coasts of Guanacaste and Puntarenas
accounted for the large increase.
3. While the BCCR's foreign currency reserves stood at more than
$3.1 billion at year's end, Jorge Madrigal, BCCR Economic Director,
announced that total reserves including those of the commercial
banks reached $3.88 billion, equal to 14% of GDP. This represents
an increase of $966 million during 2006. In addition to the good
news of the doubling of FDI, Madrigal indicated that the central
bank's monetary policy was responsible for lowering devaluation of
the Colon from 8.2% in 2005 to 4.4% for 2006.
2005 2006
Real Growth Rate GDP 5.6% 6.8%
FDI $861m $1.4b
Foreign Reserves $2.91b $3.88b
Devaluation 8.5% 8.1%
LANGDALE
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECONCS
SUBJECT: THE COSTA RICAN ECONOMY IMPROVES DURING 2006
REF: SAN JOSE 213
1. Banco Central de Costa Rica (BCCR) says the country's GDP grew
over 7% in 2006. This is the highest GDP growth rate since 8% in
1999. Inflation for 2006 was 9.4%, 5 percentage points lower than
last year's rate of 14.4%, and the lowest rate in 14 years. While
foreign direct investment flows reached a record $1.4 billion,
surprisingly, the tourism industry reports a disturbing trend of
apparent stagnation.
2. Tourism during 2006 grew by a surprisingly meager 1.8% (See
Reftel). Tourism Minister, Carlos Benevides, explained to local
media that Costa Rica is a 'mature product' attracting a different
type of buyer. In contrast, other key sectors such as agriculture
and free zone manufacturing showed marked improvement. In 2006 FDI
flows doubled from the $861 million level registered in 2005.
According to Minister Benevides, real estate investment for tourism
development along the Pacific coasts of Guanacaste and Puntarenas
accounted for the large increase.
3. While the BCCR's foreign currency reserves stood at more than
$3.1 billion at year's end, Jorge Madrigal, BCCR Economic Director,
announced that total reserves including those of the commercial
banks reached $3.88 billion, equal to 14% of GDP. This represents
an increase of $966 million during 2006. In addition to the good
news of the doubling of FDI, Madrigal indicated that the central
bank's monetary policy was responsible for lowering devaluation of
the Colon from 8.2% in 2005 to 4.4% for 2006.
2005 2006
Real Growth Rate GDP 5.6% 6.8%
FDI $861m $1.4b
Foreign Reserves $2.91b $3.88b
Devaluation 8.5% 8.1%
LANGDALE