Costa Rica’s stable economy primarily relies on tourism, agriculture, and export of electronics. Poverty has been substantially reduced over the past decade and a half  and a strong social safety net has been put into place.

Foreign investors are attracted by the country’s political stability and high education levels, and tourism continues to bring in foreign exchange. Low prices for coffee and bananas have hurt the agricultural sector.

The government continues to grapple with its large internal and external deficits and sizable internal debt. The reduction of inflation remains a difficult problem because of rises in the price of imports, labor market rigidities, and fiscal deficits.

The country also needs to reform its tax system and its pattern of public expenditure. Costa Rica is the only signatory to the US-Central American Free Trade Agreement (CAFTA) that has not ratified it. CAFTA implementation would result in economic reforms and an improved investment climate.