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Costa Rica set to begin reopening economy

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Costa Rica set to begin reopening economy

Local vendors distributing fruit in San Jose
Photo: Reuters/Juan Carlos Ulate

Costa Rica begins the reopening of its economy today after weeks of restrictions successfully arrested the spread of COVID-19.

San José did not implement mass stay-at-home restrictions. Instead, the government closed its borders to foreign travellers, cancelled large events and limited domestic road traffic early in March. These measures, combined with the country’s inexpensive and accessible healthcare system, have contributed to one of the lowest rates of COVID-19 transmission in the Americas. Only 300 cases are still active in the country, and infections have slowed for the last eleven days.

As the spread of the virus slows, gyms, entertainment venues and hair salons will reopen—though with reduced hours and limited customer service. Other classes of businesses will open over the next several fifteen-day periods.

The government hopes to resuscitate the economy, which is expected to plummet by 3.6% this year as a result of the lack of demand for Costa Rican exports, particularly in agriculture and tourism. These industries may take years to recover and signal a long-term dilemma for the government in San José. Furthermore, it is not likely that a massive stimulus is in the works. Underlying fiscal deficit problems and recently contracted debt obligations to the IMF will make a government-led recovery difficult.

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