Home

Costa Rica vs. Panama

Economy

Costa RicaPanama
Economy - overviewSince 2010, Costa Rica has enjoyed strong and stable economic growth - 4.3% in 2016. Exports of bananas, coffee, sugar, and beef are the backbone of its commodity exports. Various industrial and processed agricultural products have broadened exports in recent years, as have high value-added goods, including medical devices. Costa Rica's impressive biodiversity also makes it a key destination for ecotourism.

Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the incentives offered in the free-trade zones; Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR), which became effective for Costa Rica in 2009, helped increase foreign direct investment in key sectors of the economy, including insurance and telecommunication. However, poor infrastructure, high energy costs, a complex bureaucracy, weak investor protection, and uncertainty of contract enforcement impede greater investment.

Costa Rica’s economy also faces challenges due to a rising fiscal deficit, rising public debt, and relatively low levels of domestic revenue. Poverty has remained around 20-25% for nearly 20 years, and the government’s strong social safety net has eroded due to increased constraints on its expenditures. Costa Rica’s credit rating was downgraded from stable to negative in 2015, upping pressure on lending rates - which could hurt small business, on the budget deficit - which could hurt infrastructure development, and on the rate of return on investment - which could soften foreign direct investment (FDI). Unlike the rest of Central America, Costa Rica is not highly dependent on remittances - which represented just 0.7% of GDP in 2015, but instead relies on FDI - which accounted for 4% of GDP.
Panama's dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism and Panama is a center for offshore banking. Panama's transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $37 billion in 2016 because of excessive government spending and public works projects. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012.

Future growth will be bolstered by the Panama Canal expansion project that began in 2007 and was completed in 2016 at a cost of $5.3 billion - about 10-15% of current GDP. The expansion project more than doubled the Canal's capacity, enabling it to accommodate high-capacity vessels such as tankers and neopanamax vessels that are too large to traverse the existing canal. The US and China are the top users of the Canal.

Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.
GDP (purchasing power parity)$85.2 billion (2017 est.)
$82.08 billion (2016 est.)
$78.68 billion (2015 est.)
note: data are in 2017 dollars
$99.43 billion (2017 est.)
$94.43 billion (2016 est.)
$90.04 billion (2015 est.)
note: data are in 2017 dollars
GDP - real growth rate3.8% (2017 est.)
4.3% (2016 est.)
4.7% (2015 est.)
5.3% (2017 est.)
4.9% (2016 est.)
5.8% (2015 est.)
GDP - per capita (PPP)$17,200 (2017 est.)
$16,700 (2016 est.)
$16,200 (2015 est.)
note: data are in 2017 dollars
$24,300 (2017 est.)
$23,400 (2016 est.)
$22,700 (2015 est.)
note: data are in 2017 dollars
GDP - composition by sectoragriculture: 5.5%
industry: 21%
services: 73.5% (2017 est.)
agriculture: 2.4%
industry: 15.7%
services: 77% (2017 est.)
Population below poverty line21.7% (2014 est.)
23% (2015 est.)
Household income or consumption by percentage sharelowest 10%: 1.5%
highest 10%: 36.9% (2014 est.)
lowest 10%: 1.1%
highest 10%: 38.9% (2014 est.)
Inflation rate (consumer prices)1.7% (2017 est.)
0% (2016 est.)
1.6% (2017 est.)
0.7% (2016 est.)
Labor force2.229 million
note: official estimate; excludes Nicaraguans living in Costa Rica (2017 est.)
1.633 million
note: shortage of skilled labor, but an oversupply of unskilled labor (2017 est.)
Labor force - by occupationagriculture: 14%
industry: 22%
services: 64% (2006 est.)
agriculture: 17%
industry: 18.6%
services: 64.4% (2009 est.)
Unemployment rate8.1% (2017 est.)
9.3% (2016 est.)
5.5% (2017 est.)
5.5% (2016 est.)
Distribution of family income - Gini index48.5 (2014)
49.2 (2013)
50.7 (2014 est.)
56.1 (2003)
Budgetrevenues: $8.262 billion
expenditures: $11.34 billion (2017 est.)
revenues: $12.6 billion
expenditures: $13.56 billion (2017 est.)
Industriesmedical equipment, food processing, textiles and clothing, construction materials, fertilizer, plastic products
construction, brewing, cement and other construction materials, sugar milling
Industrial production growth rate4.4% (2017 est.)
4.7% (2017 est.)
Agriculture - productsbananas, pineapples, coffee, melons, ornamental plants, sugar, corn, rice, beans, potatoes; beef, poultry, dairy; timber
bananas, rice, corn, coffee, sugarcane, vegetables; livestock; shrimp
Exports$10.55 billion (2017 est.)
$10.15 billion (2016 est.)
$15.48 billion (2017 est.)
$14.7 billion (2016 est.)
note: includes the Colon Free Zone
Exports - commoditiesbananas, pineapples, coffee, melons, ornamental plants, sugar; beef; seafood; electronic components, medical equipment
fruit and nuts, fish, iron and steel waste, wood
Exports - partnersUS 41%, Netherlands 5.8%, Panama 5.7%, Belgium 5.4%, Nicaragua 5.2%, Guatemala 5.2% (2016)
US 21.4%, Netherlands 15.2%, Costa Rica 6%, China 5.6% (2016)
Imports$15.55 billion (2017 est.)
$14.66 billion (2016 est.)
$21.22 billion (2017 est.)
$22.48 billion (2016 est.)
note: includes the Colon Free Zone
Imports - commoditiesraw materials, consumer goods, capital equipment, petroleum, construction materials
fuels, machinery, vehicles, iron and steel rods, pharmaceuticals
Imports - partnersUS 37.1%, China 13.5%, Mexico 6.9% (2016)
US 25.7%, China 9.2%, Mexico 5.3% (2016)
Debt - external$25.83 billion (31 December 2017 est.)
$24.3 billion (31 December 2016 est.)
$86.55 billion (31 December 2017 est.)
$83.81 billion (31 December 2016 est.)
Exchange ratesCosta Rican colones (CRC) per US dollar -
573.5 (2017 est.)
544.74 (2016 est.)
544.74 (2015 est.)
534.57 (2014 est.)
538.32 (2013 est.)
balboas (PAB) per US dollar -
1 (2017 est.)
1 (2016 est.)
1 (2015 est.)
1 (2014 est.)
1 (2013 est.)
Fiscal yearcalendar year
calendar year
Public debt66.2% of GDP (2017 est.)
62.7% of GDP (2016 est.)
38.8% of GDP (2017 est.)
38.6% of GDP (2016 est.)
Reserves of foreign exchange and gold$7.523 billion (31 December 2017 est.)
$7.574 billion (31 December 2016 est.)
$3.888 billion (31 December 2017 est.)
$3.878 billion (31 December 2016 est.)
Current Account Balance-$2.291 billion (2017 est.)
-$1.88 billion (2016 est.)
-$2.99 billion (2017 est.)
-$3.151 billion (2016 est.)
GDP (official exchange rate)$58.91 billion (2016 est.)
$59.05 billion (2016 est.)
Stock of direct foreign investment - at home$35.01 billion (31 December 2017 est.)
$31.84 billion (31 December 2016 est.)
$56.02 billion (31 December 2017 est.)
$50.62 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad$4.327 billion (31 December 2017 est.)
$3.781 billion (31 December 2016 est.)
$11.59 billion (31 December 2017 est.)
$10.71 billion (31 December 2016 est.)
Market value of publicly traded shares$2.015 billion (31 December 2012 est.)
$1.443 billion (31 December 2011 est.)
$1.445 billion (31 December 2010 est.)
$12.54 billion (31 December 2012 est.)
$10.68 billion (31 December 2011 est.)
$8.348 billion (31 December 2010 est.)
Commercial bank prime lending rate11.8% (31 December 2017 est.)
11.64% (31 December 2016 est.)
8.2% (31 December 2017 est.)
7.53% (31 December 2016 est.)
Stock of domestic credit$34.3 billion (31 December 2017 est.)
$33.43 billion (31 December 2016 est.)
$49.89 billion (31 December 2017 est.)
$46.41 billion (31 December 2016 est.)
Stock of narrow money$5.765 billion (31 December 2017 est.)
$5.536 billion (31 December 2016 est.)
$8.911 billion (31 December 2017 est.)
$8.249 billion (31 December 2016 est.)
Stock of broad money$22.52 billion (31 December 2017 est.)
$21.85 billion (31 December 2016 est.)
$42.8 billion (31 December 2017 est.)
$38.14 billion (31 December 2016 est.)
Taxes and other revenues14% of GDP (2017 est.)
21.3% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-5.2% of GDP (2017 est.)
-1.6% of GDP (2017 est.)
Unemployment, youth ages 15-24total: 23.3%
male: 18.8%
female: 31.7% (2016 est.)
total: 11.5%
male: 9%
female: 16% (2016 est.)
GDP - composition, by end usehousehold consumption: 63.6%
government consumption: 17.2%
investment in fixed capital: 19.3%
investment in inventories: 0.4%
exports of goods and services: 32.9%
imports of goods and services: -33.3% (2017 est.)
household consumption: 48.2%
government consumption: 10.1%
investment in fixed capital: 42.8%
investment in inventories: 3.2%
exports of goods and services: 49.4%
imports of goods and services: -53.7% (2017 est.)
Gross national saving16.2% of GDP (2017 est.)
16.5% of GDP (2016 est.)
15.9% of GDP (2015 est.)
40.2% of GDP (2017 est.)
40.6% of GDP (2016 est.)
39.3% of GDP (2015 est.)

Source: CIA Factbook