Foreign Direct Investment in Costa Rica Rises by 42%, Reaches Historic High in Q1 2024

Record Investment of US$ 1.188.9 Million Marks Highest Figure for a First Quarter

The first quarter of 2024 saw an unprecedented surge in foreign direct investment (FDI) in Costa Rica, with figures released by the Central Bank of Costa Rica (BCCR) revealing a 42% increase compared to the same period in 2023. The FDI inflows reached a historic US$ 1.188.9 million, marking a substantial rise of US$ 349.7 million from the previous year.

Significant Growth Outside the Greater Metropolitan Area

One notable aspect of this growth is the significant increase in FDI outside the Greater Metropolitan Area (GAM). Investments in these regions saw a remarkable rise from a negative US$ -14.4 million in 2023 to US$ 49.6 million in 2024, amounting to a US$ 64 million increase. This shift underscores the growing appeal of areas beyond the GAM for foreign investors.

Official Statements and Analysis

Manuel Tovar, Costa Rica's Minister of Foreign Trade (COMEX), highlighted the success of the country’s investment promotion strategies:

"These growth figures, with a 42% increase in FDI compared to the same period last year and the highest ever recorded in a first quarter, confirm that we have made the right decisions. They reflect the excellent performance of PROCOMER as the official agency for attracting and promoting investments. We are on the right path to bringing more job opportunities to the entire country, generating productive linkages, and transferring knowledge. This also commits us to honoring the trust of businesses and continuously optimizing our value proposition to remain their top choice for growth and expansion decisions."

Breakdown of Investment by Sector and Regime

In the first quarter of 2024, 61.5% of FDI was directed to free trade zones, 13.5% to companies under the definitive regime, 12.1% to tourism, 6.6% to the financial sector, 6% to real estate, and 0.2% to active improvement. Compared to the first quarter of 2023, the most significant increase was observed in regular companies, with investments rising from US$ 58.5 million to US$ 160.6 million in 2024—a difference of US$ 102.1 million. Free trade zones also saw a notable increase of US$ 91.1 million.

Sector-wise Distribution

FDI in the manufacturing sector accounted for 49.4% of the total, followed by the services sector at 16.1%, tourism at 12.1%, commerce at 7.3%, the financial sector at 6.6%, real estate at 6%, agriculture at 2.1%, and agroindustry at 0.3%. All sectors experienced significant increases compared to 2023, with tourism growing by 133%, services by 62%, and commerce by 59%.

Laura López, General Manager of the Foreign Trade Promoter of Costa Rica (PROCOMER), emphasized the success of the new investment attraction model:

"The results of the first quarter of 2024 in foreign direct investment flows are a clear indicator that our new investment attraction model is yielding results, especially outside the Greater Metropolitan Area. The significant increase in investments in these regions underscores the effectiveness of our strategy to promote regional development and diversify our sources of economic growth. We are committed to continuing to strengthen this momentum to ensure that Costa Rica remains an attractive destination for global investors."

Sources of Investment

The United States maintained its leading position, contributing 73% of the total FDI during the first quarter of 2024. Other notable sources included Colombia (4%), Mexico (4%), Switzerland (3%), and Brazil (3%).

Adjustments to 2023 Investment Figures

In addition to the current data, the BCCR reported a downward adjustment in the total investment flows for 2023, revising the figure to US$ 3.788,2 million, down from the previously reported US$ 3.921,4 million.

Costa Rica's significant growth in FDI during the first quarter of 2024 underscores the country's robust investment climate and the effectiveness of its strategic initiatives to attract foreign investments. As the nation continues to develop and implement policies that favor both investors and regional development, it remains a key destination for global investment flows.

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