Caribbean & Central America - January 2007 (ISSN 1741-4458)

President Oscar Arias is forecasting that the economy will grow by 7% in 2007. He claims that the main engines of growth will be increased exports and higher foreign direct investment. He also expects a fall in inflation. Arias expects exports in 2007 to top US$10bn, up from US$8bn in 2006. The main reason for the increase will be, Arias says, a surge in exports to the US following Costa Rica's ratification of the Central American-Dominican Republic free trade agreement (Cafta-DR) with the US. The government also expects exports to receive a boost from the free trade agreements in the works with Panama and the negotiations between Central America and the European Union over an association agreement. On foreign direct investment (FDI), the government expects at least US$1.5bn to arrive in 2007. In 2006, the central bank said that FDI came to US$1.4bn.

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