While we originally thought the covid-19 pandemic would last about three months, we are now seeing that it will be with us for a longer term. The pandemic has brought with it a shock to the economy and fear of even further deterioration in most sectors.
The monthly index of economic activity for May 2020 has been revealed. Compared to the same month last year, there is a 7.5% decrease in economic activity.We had been seeing a recovery until February but, by May, 13 of the 15 industries measured took a hit.
The only ones to grow, and the growth was modest, were construction and public administration. The special regime of free zones and inward processing companies are usually strong, showing double-digit growth for years, contracted 12.1%. The tourism and transport sector was the hardest hit thus far. Accommodation and food supply services decreased 60.8%, comparing May 2020 to May 2019. Transport decreased 32.1%. With vehicle restrictions, limitations on restaurants and hotels, and closed borders, this was to be expected.
Economist Alberto Franco estimates that we will see “downward adjustments in projections of growth of economic activity in Costa Rica during this year and next.”