Citigroup cuts Costa Rica growth forecast after Intel, BofA closings

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April 10th, 2014 (InsideCostaRica.com) Citigroup Inc. has cut Costa Rica’s growth forecast after announcements this week that Intel would close its manufacturing operations and Bank of America would close its facilities in the country, leaving 3,000 people unemployed.

 

Citi cut its growth forecast of Costa Rica’s GDP from 3.5% to 3.1% for 2014, according to a report from Bloomberg.  Its growth forecast for 2015 was slashed even further, from 4% to 2.2%.

 

Intel’s closure of its manufacturing operations will have a direct impact on the country’s exports and produce a drop in the country’s GDP, economists warned earlier this week – estimates indicate that Intel’s manufacturing operations represent 5% of the country’s entire GDP and more than 20% of the country’s exports.

 

Intel’s departure is also expected to affect 2,500 to 3,500 people who work as part of the company’s supply chain.

 

Both Intel and Bank of America announced the layoffs on Tuesday.  Bank of America’s Costa Rica facilities provided back office support and employed some 1,500 people.

 

President Laura Chinchilla earlier this week said Intel’s departure would not affect the country’s image, adding that “some [companies] would come and some would go.”  Chinchilla said several new multinationals would be setting up shop soon, without providing details.

 

The announcements came just two days after Luis Guillermo Solis was elected to be Costa Rica’s next president.  Solis will take office on May 8th.

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