Friday 5 March 2021

What will be the impact of the coronavirus on the Costa Rica economy?

The cost of imported products would increase; Tourism would benefit if foreigners chose Costa Rica instead of affected destinations

The impact of the coronavirus on Costa Rica’s economy depends on the extent of contagion and how long it will last, as well as the effectiveness of government measures, such as interest rate cuts.

Image La Republica

However, the impact would be felt to a greater or lesser degree in the Costa Rican commercial sector: an increase in the cost of a number of imported products and, possibly, also in tourism.

- Advertisement -

While the demand for Costa Rican products would fall in other markets after the slow growth of the global economy, the price of imports would increase due to the fact that the production of factories in several parts of Asia, especially in China, is suspended.

T-shirts, cars, cell phones and construction materials are some of the goods affected in China, which represents 16% of global industrial production.

The impact of the virus in South Korea and Japan is less than in China; However, both countries are affected.

As far as tourism is concerned, there could be fewer visitors, given the fear of many people traveling for several hours in an aircraft with hundreds of people, as well as being in a country where they do not know what health services are like.

- Advertisement -

On the other hand, Costa Rica could benefit if foreign tourism, especially North American – the main source – chose to come here instead of Europe or Asia.

In fact, arrivals in Liberia, both last month and January, were greater than those of the same period of 2019.

Demand in the rest of the world for Costa Rican products, meanwhile, would fall, while global growth expectations worsen.

As for interest rates, it is possible that, if it had a very serious affectation, Costa Rica’s Central Bank would have to take measures.

Uncertain tourism

Costa Rica could receive fewer visitors for the fear of many people traveling; or, it could benefit if foreigners, mainly Americans, chose to come here instead of affected destinations.

María Amalia Revelo, Minister of Tourism, told La Republica that airplane seats available to Costa Rica for the first half of this year show an increase of 5%, and that the Instituto Costarricense de Turismo (ICT) – Tourism Board – has been in contact with the main airlines that serve our priority markets, which do not yet report an impact on their reservations to Costa Rica.

- Advertisement -

But that could change as the virus spreads and the decision not to travel, in general, because of the coronavirus is taken.

There will be an affectedness

While the ICT sees the situation with optimism, other experts estimate that the coronavirus would affect the economy.

Laura Bonilla, president of the Chamber of Exporters, says exporters are concerned that at the logistic level congestion is reported in ports in Asia; that is to say, there are problems with the entry of ethical products.

“Some shipping lines have canceled of departures of ships from different ports. As for Europe, we already have reports of a drop in the consumption dynamics of the population of strategic countries, the market has become slow,” said Bonilla.

Allan Calderón, Deputy General Manager of Risk at the Banco Nacional, said “Costa Rica’s economy depends on and receives international prices, it affects a reduction in interest rates related to dollars. Although for those who have credits in dollars it reduces their monthly payments, in general, it is not good news, because it indicates that the economy would be slower and with less generation of employment and foreign investments, since there would be uncertainty worldwide.”

 

 

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Ricohttp://www.theqmedia.com
"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Loans in dollars loses attractiveness for those who earn in colones

QCOSTARICA - Loans in dollars, which had a great boom in...

Interventions by the Central Bank will be key so that Colon does not depreciate this yea

QCOSTARICA - The notorious influence of the Central Bank (Banco Central)...

MOST READ

Loans in dollars loses attractiveness for those who earn in colones

QCOSTARICA - Loans in dollars, which had a great boom in 2000, began to slow down since 2016 and today, despite the fact that...

24 Travelers found with false covid-19 test at San Jose airport

QCOSTARICA - A total of 24 travelers, so far, face problems with the law when discovered trying to leave Costa Rica, through the San...

50 years ago the San Carlos River was crossed by ferry and these were the rates

TODAY COSTA RICA - Before the Office of the Comptroller General (CGR), the rate agreed by the Municipality of the canton of San Carlos...

In a week, Costa Rica off and on the list of risk countries in Spain for covid-19

QCOSTARICA - Spain had excluded Costa Rica from the list of risk countries to enter by air for presenting a negative covid-19 test (RT-PCR,...

Torre del Bicentenario: An envisioned project to commemorate Costa Rica’s 200th

QCOSTARICA - To commemorate the Bicentennial of Costa Rica that occurs in 2021, Inverse Project has designed the Torre del Bicentenario for this important...

Islas Murciélago, unknown Tico paradise ideal for hikers and divers

Q TRAVEL - Located in the extreme north of the Pacific coast, in front of the Santa Rosa National Park, in the sector of...

In the first year of the pandemic, Costa Rica has the fifth lowest mortality from covid-19 in Latin America

QCOSTARICA -  How has Costa Rica done during its first year in the fight against covid-19? If you ask the demographer Luis Rosero Bixby,...

The Quijongo!

QCOSTARICA - The quijongo is now in very good health thanks to the care of the people of Guanacaste, who are dedicated to protecting...

IMF sets its clear requirements for Costa Rica

QCOSTARICA - The International Monetary Fund (IMF) finally said yes to the loan for almost US$1.78 billion and to the fiscal adjustment commitment proposed...

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.