Costa Rica: Economic, security, and social developments

Costa Rica is facing several significant domestic challenges and developments across its economic and social sectors. According to the Economic and Social Observatory of the Universidad Nacional, tax revenues have declined, with central government income dropping to 9.18% of GDP by August 2026. This decline is primarily attributed to weakened Value Added Tax (VAT) and income tax collections, leading to a projected financial deficit of up to 3.9% of GDP.

In the security sector, the National Mechanism for the Prevention of Torture has raised concerns regarding the new High-Security Center for Organized Crime (CACCO). Officials warn that the threat of transfer to this facility is being used to intimidate inmates. The Justice Ministry defends the strict protocols, which include limiting inmates to one hour of outdoor time per day, as necessary for security and hygiene.

Additionally, the tourism and construction sectors show mixed trends. Guanacaste currently accounts for 64% of the country’s hotel construction projects, driven by a surge in heavy machinery imports. Meanwhile, San José is hosting the XXI Central American and Caribbean Youth Chess Championship, an event aimed at boosting regional sports tourism.