Our comprehensive assessment of Costa Rica's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Costa Rica, as well as the latest industry developments that could impact Costa Rica's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Costa Rica before your competitors.
Costa Rica Country Risk
Costa Rica Industry Coverage (8)
Costa Rica Agribusiness
BMI View: Â The region is still struggling with disease outbreaks in the coffee sector in 2013/14. We believe the region will continue to suffer as low global coffee prices limit investment potential. Even if prices have rebounded recently, we believe they are overstretched and see them going back towards the USc140-150/lb level in the near term. Central America is generally dependent on imports for corn, and we expect the production deficit to widen over our forecast period. That said, Central America is expected to remain self-sufficient in sugar and even increase its potential for sugar exports. The sugar industry has the potential to attract investment over the medium term.
|Coffee & Sugar Ahead Of The Rest|
|Central America - BMI Market Value By Commodity (% of total)...|
Costa Rica Autos
BMI View: Â The outlook for the autos industry in the Central Americas region in 2014 is modest, with tepid sales growth expected in some markets, but contractions likely in others. This is broadly in line with our outlook for the Latin America region, although many markets in Central America are very small in volumes terms, and modest changes in sales figures could have a relatively large impact on the year-on-year (y-o-y) growth rate.Â
Income distribution across much of the region is highly unequal, and the majority of headline spending growth comes from the relatively wealthy sections of the population. This income structure is likely to continue to restrict growth in the regional autos sector.
Food & Drink
Costa Rica Food & Drink
The region's economic trajectory remains divergent. Despite our expectations for slower real GDP growth in Panama in the next several years, it will remain the regional outperformer. On the other hand, we have a more mixed outlook for growth in the 'northern triangle' countries. While they will likely benefit from improved agricultural yields and stronger US demand for manufactured goods, Guatemala, Honduras and El Salvador are still vulnerable to significant structural macroeconomic weaknesses.Â
Headline Industry Data (regional averages)
2014Â per capita food consumption (USD) = +4.82%; forecast compound annual growth rate (CAGR) 2013 to 2018 = +4.18%.
2014 alcoholic drink sales (litres) = +4.41%; forecast CAGR 2013 to 2018 = +2.30%.
2014 soft drink sales (litres) = +5.01%; forecast CAGR...
Costa Rica Infrastructure
BMI View: There is a wide divergence of performance and opportunities across the various construction industry markets in Central America. With comparatively low levels of risk, we expect Panama and Costa Rica to continue to lead both in terms of industry value and real growth. With regards to the region's underperformers, Guatemala and El Salvador continue to report the lowest level of growth but we anticipate this to change over the medium term as there is significant potential in both markets for the development of transport infrastructure.
We see high risks, small scale and limited growth opportunities across the region as a whole. A crucial factor underpinning our forecasts for infrastructure investments in future years is political risk. This is a particular concern in El Salvador, Honduras, and Guatemala where high levels of crime, homicide, violence, and insecurity exacerbate...
Costa Rica Insurance
BMI View: Collectively, the six insurance markets of Central America represent a medium-sized, and quite rapidly growing, market opportunity. The insurers themselves, and their corporate clients, have proven themselves to be resilient in the face of challenging business environments. Many companies are innovating in both distribution and products to increase insurance penetration in their markets .
BMI expect Central American insurance markets to continue to grow rapidly in the coming years. The annual average growth is forecast to be between 7.8% - 11.3% (Guatemala is the lowest and Nicaragua the highest). Â We would highlight Panama and Costa Rica as markets which will outperform in absolute terms. Consumers in these insurance markets have the greatest ability to afford insurance and the insurance companies that operate are established and able...
Pharmaceuticals & Healthcare
Costa Rica Pharmaceuticals & Healthcare
BMI View: Costa Rica and Panama will continue to outperfor m other Central American countries, namely El Salvador, Guatemala, Honduras, Nicaragua and Belize . The business-friendly environment, high per-capita medicine spending and strong consumer demand still present strong revenue-generating opportunities for multimodal pharmaceutical companies.
Headline Expenditure Projections
Pharmaceuticals: USD3.5bn in 2013Â to USD3.7bn in 2014; +4.1%. Our forecast has been revised slightly down since Q314 due to less promising industry data.
Costa Rica Telecommunications
BMI View: T he future for telecoms operators lies in the expansion of content and encouraging consumers to use their mobile connections for a growing range of lifestyle needs. Regional market leader Tigo has been most active in launching its range of mobile financial services (MFS) , which are seeing rapid take up. Pay-TV is increasingly on the radar of operators in the region, although the market potential remains small. Mobil e forecasts show much slower growth across the board, with only Nicaragua offering any real growth potential.
New data from the Panamanian regulator show the market to have grown more slowly than previously expected and a decline in subscriptions in 2012. These revisions meet BMI's expectations that the market contains a...
Costa Rica Tourism
BMI View: Â The Costa Rica T ourism R eport raises concerns about the proliferation of drug-trafficking throughout Central America, which poses a challenge to Costa Rican authorities and could deter tourism to the region. We also analyse the growth strategies being employed by the country to continue to attract arrivals, including airport and port expansions, as well as continued efforts to remain an eco-tourism destination.
Despite the positive prognosis for tourism arrivals growth in 2014, the industry is expecting a mid-year slowdown as a result of the World Cup in Brazil between June and July. A report by Costa Rica's National Tourism Chamber found that hoteliers think the football tournament encouraged tourists to go to Brazil who might otherwise have gone to Costa Rica. In...