Costa Rica’s exchange rate has captured the attention of various sectors in the country, as it significantly impacts the economy. Manuel Tovar, Minister of Foreign Trade and President of the Foreign Trade Promoter (PROCOMER), recently sent a letter to the Central Bank of Costa Rica’s Board of Directors, urging them to stabilize the exchange rate due to the ongoing decline’s damage to the country’s export sector.
Tovar called for a prompt assessment of the current exchange and monetary policies, which have faced opposition from Costa Rica’s productive sector and some factions of the Legislative Assembly. He noted in his letter that these policies severely hinder the income and job creation potential of different sectors, negatively affecting the country’s development and competitiveness.
Tovar highlighted that the colón has appreciated 25% against the US dollar since 2022, making Costa Rica the second highest appreciating country in terms of exchange rates compared to major Foreign Direct Investment (FDI) competitors. He also pointed out a 26% reduction in professional and administrative support activity jobs from 2022 to 2023, including shared services companies and contact centers.
PROCOMER revealed that some Free Trade Zone companies are halting or cutting back new projects and reinvestments, decreasing or eliminating salary raises, pausing new hires, partially reducing work hours, and even contemplating moving their operations to other countries.
Tovar emphasized the concerning situation that many businesses in different productive sectors now face. The primary collateral damage includes a rise in unemployment and instability in these economic sectors.
Tovar observed that operational costs are increasing much faster than the country’s economy, forcing businesses to adjust their operations, resulting in job losses and limited growth opportunities.
Key Takeaways From Article
1. Be aware of the exchange rate: The text highlights that the exchange rate in Costa Rica is constantly declining. When planning a trip to the country, it’s important to stay informed about the current exchange rate to understand how it may affect your travel budget.
2. Consider the impact on the economy: The declining exchange rate is affecting the country’s export sector and employment opportunities. As a responsible traveler, it’s important to consider the local economy and its challenges when deciding how to spend your money during your trip.
3. Be flexible with your travel plans: The text mentions that some companies in Costa Rica are considering relocating their operations to other countries due to the unfavorable exchange rate. This could potentially impact tourism in the future. As a traveler, it’s important to be flexible and adapt your travel plans if necessary.
4. Support local businesses: The text mentions that companies in various productive sectors are facing difficulties. By supporting local businesses and buying local products and services, you can contribute to the economic stability of these sectors and create more employment opportunities.
5. Monitor the situation closely: The text indicates that the Minister of Foreign Trade has requested measures to stabilize the exchange rate. Stay updated with the latest news and developments regarding the exchange rate in Costa Rica to make informed decisions during your trip.
6. Seek advice from local experts: If you have concerns or questions about how the exchange rate may affect your travel plans or budget, it’s a good idea to seek advice from local experts, such as travel agencies or financial institutions. They can provide you with up-to-date information and guidance for your specific situation.