Costa Rica’s economy will struggle in 2002

San Jose._ The Costa Rican economy won’t get a dramatic new lease on life this year as the Gross National Product (GNP) will barely grow a meager 1.3%, reportedly forecast the Economic and Financial Advisors enterprise (CEFSA).

The available GNP will grow just 1.9% while the country’s population increases at a 2.3% annual rate. This means Costa Ricans earn less revenues, CEFSA indicated.

Moreover, the combined budget deficit (including the government, the Central Bank and state-run institutions) will jump to 4.5% of the total GNP, a clearer indication of the country’s downtrodden finances.

Furthermore, higher domestic interest rates coupled with the current level of the nation’s foreign debt are putting more heat on interest spending.

CEFSA also sees the writing on the wall for Costa Rica’s foreign sector, for almost half of the country’s income money depends on currently dwindling exports.

Tourism won’t fare like in past years, another element that pushes the current-account budget to dip into its already shallow pockets. Interest rates are failing to lure foreign investors.

CEFSA also stresses that in order to bridge the financial gap, some $100 million from the nation’s coffers will have to be spent. The current-account deficit in the balance of payments will amount to 5% of the GNP.

With a view to avoid further damage, CEFSA believes basic macroeconomic unbalances must be mended: the fiscal and the current-account deficits.