Economic challenges to endure for Costa Rica’s Chaves

Significance

Chaves had a difficult start to his presidency, facing economic challenges linked to the post-pandemic recovery, the impacts of a major cyberattack on government computer systems, and global food and fuel disruption caused by Russia’s war on Ukraine. He has sought to address these issues and boost economic growth.

Impacts

• Economic weakness will foster more trade diversification efforts; Costa Rican membership of the Trans-Pacific Partnership has been mooted.
• If prolonged, high inflation and slowing economic growth could lead to increased strike action.
• Proposed fuel-price caps will see opposition parties seek to portray Chaves as overly interventionist.
• Chaves’s populist tone could impress the public, if he is viewed as offering solutions in the face of congressional obstructionism.