Costa Rica faces investment slowdown amid currency appreciation

Costa Rica is experiencing a slowdown in its Free Trade Zone sector, driven by currency appreciation and shifting economic dynamics. Federico Quesada Chaves, director at the Universidad Estatal a Distancia (UNED), warned that the country must address exchange rate volatility, infrastructure, and technological integration to maintain its competitiveness for foreign investment.

Data from the Central Bank of Costa Rica indicates a significant deceleration in special regimes. In April, growth slowed by 12.3 percentage points compared to the previous year, with similar declines noted in May, particularly within medical device manufacturing and professional services.

The Chamber of Industry of Costa Rica (CICR) reports that the appreciation of the colón—approximately 10% this year—has led companies to suspend expansion plans and reduce staff. According to the CICR, two out of ten companies in the Free Trade Zone regime have implemented layoffs due to the lower value of the dollar. Other reported impacts include reduced profitability, lower income when converting dollars to local currency, and challenges regarding raw material costs and human capital.