The Economy Grew 4.7% in February, but the Growth Engine Is Shifting

Construction has quietly become the country's strongest sector. Free trade zone momentum is cooling. And Asia is reshaping the export map.

The economy expanded 4.7% year over year in February 2026, a pace that looks reassuringly steady. But beneath that number, the composition of growth is changing in ways that matter more than the headline.

The IMAE trend cycle index, the central bank's primary gauge of monthly economic activity, shows an economy still firing on multiple cylinders. Manufacturing grew 4.8%. Services remained solid. Yet the sector doing the real heavy lifting may surprise: construction activity surged 11.8%, driven by private residential projects and accelerating public infrastructure work under the government's PROERI program.

For a country that built much of its recent economic identity around high tech exports and free trade zone manufacturing, that shift is worth watching.

The special regimes, home to Costa Rica's medical device makers and other export focused manufacturers, grew 6.7% in February. A year earlier, they were expanding at 14.5%. The slowdown is partly mechanical. After an exceptional 2025, the comparisons get harder. But the broader signal is real: the free trade zone sector, long the star of the growth story, is no longer the clear outperformer.

The domestic economy is stepping in. The definitive regime, which captures activity outside the export zones, grew 3.8% and contributed 72.5% of total IMAE growth in February. That is a meaningful tilt. It suggests the expansion is becoming somewhat less dependent on the fortunes of a handful of multinational exporters, and somewhat more connected to what is actually being built, spent, and consumed inside the country.

The trade picture reinforces the point. In the first quarter of 2026, Costa Rica's goods exports rose 7.2% while imports grew just 1.2%, narrowing the trade deficit to $689 million. The gap between those two growth rates is notable on its own. But the geographic story is sharper still: exports to Asia jumped 51.7%, driven largely by medical equipment shipments. Costa Rica's export mix continues tilting east.

On the labor side, the numbers are steady rather than spectacular. Total contributors to the social security system reached just over 2 million in February, up 1.7% year over year. Unemployment stood at 6.7%. Real wages per contributor rose 4.3%, and real minimum wages increased 4.6%, enough to keep pace with the cost of living and then some. Those are not boom numbers, but they point to an economy where workers are gradually gaining ground.

The broader picture: Costa Rica enters mid 2026 with solid growth, a narrowing trade deficit, improving real wages, and a construction sector that is adding momentum at a pace few other sectors can match. The question going forward is whether domestic demand and infrastructure spending can sustain that role as free trade zone growth normalizes.

For now, the economy is still expanding comfortably. The engine just sounds a little different than it did a year ago.

Source: Banco Central de Costa Rica, Informe Mensual de Coyuntura Económica, April 2026.

Key Takeaways

• The IMAE trend cycle index grew 4.7% year over year in February 2026, solid but compositionally different from a year ago.
• Construction surged 11.8%, making it the economy's strongest growth sector, fueled by private housing and public infrastructure under PROERI.
• Special regime growth slowed to 6.7% from 14.5% a year earlier, largely due to base effects after an exceptional 2025 in medical device manufacturing.
• The domestic economy contributed 72.5% of total IMAE growth, suggesting less dependence on free trade zone exports.
• Exports to Asia jumped 51.7% in Q1 2026, reshaping the country's trade geography around medical equipment demand.
• Real wages rose faster than inflation, with salaries per contributor up 4.3% and minimum wages up 4.6%.

Why This Matters

Costa Rica's growth engine is rotating. Construction and domestic activity are carrying more weight, while free trade zone manufacturing, the sector most visible to foreign investors, is decelerating from its 2025 highs. Executives, investors, and policymakers should watch whether this broadening of growth drivers is durable or temporary, and what it means for infrastructure investment, labor demand, and trade strategy.