Costa Rica recovered well from the pandemic-induced recession. Sustained and resilient export performance continues to support growth, while consumption is hindered by high inflation and unemployment. The fiscal situation improved but remains challenging, requiring sustained efforts to contain spending and boost public sector efficiency for several years. Maintaining and reinforcing the commitment to foreign direct investment and trade, which has been key to diversify the export basket, and improving the conditions for domestic companies to thrive are key challenges to boost living standards and formal job creation. This would require reducing the regulatory burden, improving the tax mix, fostering competition in key markets and continuing decarbonisation and environment protection efforts. Supporting higher female labour participation and upgrading social protection will help to adapt to ongoing demographic changes and improve the equality of opportunities. Education and training are a high priority for Costa Rica that devotes to them one of the highest spending shares among OECD countries. However, educational outcomes remain poor and firms struggle to fill their vacancies, particularly in technical and scientific positions. Improving efficiency and quality of public spending in education is needed to better support growth and equity.

SPECIAL FEATURES: EDUCATION AND TRAINING; SKILLS