Costa Rica received a broadly favorable economic review from the International Monetary Fund on Tuesday, but the IMF’s 2026 Article IV report also warned that the country faces urgent risks from an aging population, rising crime, and the need to shift from fiscal consolidation to strategic investment.
The IMF estimated that Costa Rica’s economy grew about 4.6% in 2025, well above the Latin American average. The expansion was driven largely by foreign direct investment in high-value export sectors such as medical devices, advanced manufacturing, and business services, according to the report. Costa Rica has become deeply integrated into global value chains, the fund noted, helping position the country as one of the region’s most attractive investment destinations.
The report, summarized by former Costa Rican ambassador and political scientist Óscar Álvarez Araya in a United Press International analysis, credited Costa Rica with restoring discipline to public finances after a period of rising spending and growing debt. Reforms adopted in recent years, including a fiscal rule, helped contain spending and reduce the debt-to-GDP ratio. The IMF said fiscal discipline is not an abstract technical goal but a condition for responding to crises and investing in long-term priorities.
However, the IMF added that fiscal consolidation cannot mean simply spending less. The report said Costa Rica now needs to “spend better” and to create space for strategic investment in infrastructure, education, and labor markets. Without that shift, the IMF said, fiscal discipline can become a ceiling rather than a foundation for development.
The most urgent warnings in the report concern demographics. Costa Rica’s population is aging rapidly as fertility falls and life expectancy rises. Under current conditions, the IMF said, the reserves of the disability, old age, and death pension regime could be depleted within the next decade. The report also pointed to growing financial stress in the health system administered by the Costa Rican Social Security Fund.
The IMF said demographic pressures mean that politically sensitive reforms to pensions and health care cannot wait. Delaying action, the report warned, would only transfer the burden to the next generation.
The report also highlighted citizen security as an economic risk, an issue the IMF’s macroeconomic analyses have increasingly addressed. Costa Rica’s rising crime and homicide rates, the fund said, discourage investment, raise business costs, and damage the international image of a country long known for peace and stability. The IMF said strengthening the state’s capacity to combat organized crime is now an essential condition for continued economic development.
The IMF flagged additional weaknesses in infrastructure, education, and labor markets. Gaps in roads, technical training, and workforce participation continue to constrain competitiveness, the report said. For a country whose success depends on attracting investment and connecting with global markets, the IMF described these as obstacles to the next stage of development.
The report said the benefits of growth are not distributed evenly. Highly productive sectors connected to international markets have advanced rapidly, while many domestic sectors continue to struggle with lower productivity and limited opportunities. The IMF described this dual economy as not only an economic problem but a social and political challenge.
The IMF’s overall assessment was broadly positive, according to the summary. The fund said Costa Rica continues to stand out for institutional credibility and economic resilience in a difficult international environment. But the report made clear that the country’s future will depend less on achievements already made than on reforms still pending.