Q COSTARICA — Costa Rica’s economic growth is not necessarily reflected in household income or consumption.
While the Gross Domestic Product (GDP) grew by 4.7% at the end of 2025, a trend that continued in the first quarter of 2026, with a rate of 4.6%, according to the Monetary Policy Report (MPR) of the Central Bank of Costa Rica (BCCR) for April, household income is losing momentum and showing differentiated effects among the various categories of employed.
The monetary authority acknowledges that labor income growth has slowed since the second half of 2025.
While real income—which reflects true purchasing power after discounting the effect of inflation—slowed its year-on-year growth by 1% in February 2026, nominal income—the exact amount of money a person receives—fell by 1.7%, a trend that has persisted since December 2025.
Data from the Banco Central de Costa Rica (BCCR) shows a reduction in the real income of highly skilled workers, which registered a year-on-year contraction of 7.0% (11.4 percentage points lower than in the same month of 2025).
The income of people with medium and low skill levels grew, although very slightly in the latter case.
The slower income growth compared to 2025 is observed among both public and private sector workers.
However, the difference is greater in the private sector.
Although women’s income grew year-on-year through February 2026, it did so at a slower pace (5.2%). Men’s income fell by 1.9%.
Real incomes have still not reached pre-COVID-19 pandemic levels and are almost 10% lower than those observed in February 2020.
Household Consumption
Although household consumption performed well in the first quarter of 2026, its growth will be lower this year compared to the Central Bank’s January estimates.
This is due to slower growth in real income and increased pressure on people’s purchasing power, associated with rising international fuel and food prices.
“These factors would lead to a moderation of household spending, particularly in the components most sensitive to disposable income,” the Central Bank notes.
Three Reasons
Economist Daniel Ortiz, from the firm Consejeros Económicos (Cefsa), explained that, although the Costa Rican economy is expanding, its growth is increasingly concentrated in specific sectors and is not distributed evenly among households.
“That is why GDP maintains relatively high rates, while real income and consumption for many families are losing momentum,” he stated.
Growth in the Definitive Regime (RD)—which encompasses all businesses, shops, and producers operating within the domestic or traditional economy and outside the free trade zone regime—remains lower than that of the Special Regimes (RE).
Last February, while growth in the RD was 3.8%, growth in the RE reached 6.7%.
Ortiz mentioned that the slowdown in the growth of Costa Ricans’ labor income, observed since the second half of 2025, is also related to two other factors:
In Costa Rica, inflation has been low and even negative, and although this can increase real wages, it does not automatically imply a significant improvement in purchasing power, because the incomes of many households have suffered a sharp decline since the pandemic and have not yet recovered to previous levels.
Many people have left the workforce, which has affected household incomes. The population outside the labor force reached 1,967,142 people in the quarter ending in March 2026, an increase of 117,848 compared to the same period in 2025, according to the Continuous Employment Survey of the National Institute of Statistics and Censuses (INEC).