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Friday, January 29th, 2016  |  USD: Buy 531.29 / Sell 543.92
20 years

Foreign investment in Costa Rica fell 21% in 2014

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April 6th, 2015 (InsideCostaRica.com) Foreign direct investment (FDI) in Costa Rica in 2014 totaled $2.1 billion USD, a decrease of 21% compared to the year prior, according to the latest information released by Costa Rica’s Central Bank, marking the first slowdown in foreign investment in the last six years.

 

The Central Bank’s FDI figures include investments in new business operations in the country by foreign firms as well as the expansion of existing operations.

 

Among the sectors that witnessed the biggest declines were real estate, which saw a decline of $399 million; concessions for public works, telecommunications, energy and insurance (down $121 million); tourism (down $106 million); and the commercial sector (down $105 million).

 

Jorge Sequeira, general director of the Costa Rican Coalition for Development Initiatives (CINDE), told the daily La Nacion that the figures demonstrate the need for immediate action to increase the country’s competitiveness.

 

Sequeira pointed to the rising cost of electricity, a need to revamp labor regulations, as well as the need for greater training of human resources in technical and vocational trades, as areas that are putting a drag on Costa Rica’s competitiveness.

 

Sequeira also noted the need to “ensure legal certainty” for corporations looking to do business or expand their business in Costa Rica.

 

Despite the slowdown in investment, the $2.1 billion in FDI recorded in 2014 still exceeded the country’s goal of $1.9 billion for the year.

 

And, while foreign investment in the larger economy took a hit, the country’s free trade zones saw a 22% increase in investment for the year, led in part by manufacturers of medical devices.

 

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  • prdatki

    I have lived in Costa Rica for 10yrs, I will not buy any thing the Price of Elect. has tripped, the Caja mandatory ins. is way to expensive for nothing.You pay too much for cars,for the license etc. what do you get poor sevice, bad roads and massive corruption!

    • Yeims

      You need to go back to 1492 and you will gradually develop an understanding of how things have turned out the way they have.

  • NorthendFool

    Everyone who can is leaving. Its a necessity to go somewhere else if you have choices. Locals do not have a choice. They must stay and suffer. The system has gradually taxed the expats to a breaking point. Now you weigh the pros and cons of living in Pura Vida. Do I stay and pay exorbitant prices for everything, more and more taxes, risk being killed by thug fools with guns who seem to run a muck. I say NO, i will not stay. Check the real estate ads on Craigslist and every other online rag and web site. Thousands of homes for sale. I wonder why. Obviously the property owners have had enough and feel the need to get the heck out of Dodge.

  • Chris Thomas

    What do you expect from one of the most corrupt countries on planet earth.

  • Ken Morris

    Well, FDI for real estate and tourism are roughly the same thing, and everyone with a head on their shoulders knows that this industry is maxed out. Not to say that their aren’t niches that can still be filled, but the days of that industry growing the economy are over. Solís also knows this, just getting the goose-that-laid-the-golden-egg crowd to admit it is tough.

    Also, telecommunications FDI should be down. With the opening of the cell phone market, the big foreign corporations dumped a lot of money into the country to get ICE’s share. Actually, their FDI is a longterm bad thing for Costa Rica, since the profits that used to remain in the country are leaving it.

    Meanwhile, some multinationals (the medical device bunch?) are so up to their gills in fradulent invoicing that an estimated billion dollars a year are off the books. Add that of course the free trade zones are thriving. As La Nación reported, the rest of the country’s taxepayers are subsiding them.

    It’s not the problem most people believe it is, and silly to carp about labor or electricity rates etc. when the biggest loss is in real estate for crying out loud. The problem is that the old middle-income country model won’t work anymore. People need to shake free of the old model, rather than carp about this or that hurting it, and take this economy to the next level.

  • Ben

    The goverment of Costa Rica is a real mess. Coruptions in Costa Rica and in Costa Rican goverment is so bad that to get anything done you have to be corupt. I just saw a project that was built by goverment and was over budget by 300 million. The system aka goverment staff love to hate Private sector but the truth is Goverment staff are lazy and more corupt than the Cartels and mafia. Expect lots of crime as more layoffs happen and business leave CR.

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