Costa Rica: Selected Issues and Analytical Notes

International Monetary Fund

No 2017/157, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper describes Costa Rica’s vulnerability to potential policy changes in the United States after the November 2016 presidential election and its effects on Central America. In the near term, the most likely US policy shift is a change in the macroeconomic policy mix, involving an expansionary fiscal policy—implemented initially through tax cuts—and a tighter than previously expected monetary policy stance. The results suggest that Costa Rica could be more affected through the foreign direct investment and trade channels, unlike the rest of Central America, where remittances and immigration play a key role.

Keywords: ISCR; CR; bank; FDI channel; accession process; road infrastructure; FDI scenario; LPI score; NAFTA agreement; agriculture productivity; electricity generation; power generation capacity; Pension spending; Credit gaps; Income; Credit; Countercyclical capital buffers; Central America; Global (search for similar items in EconPapers)
Pages: 91
Date: 2017-06-27
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