In recent years Costa Rica has lost about 25 percent competitiveness by comparing the real exchange rate with other currencies of competing countries in exports and tourism attraction.
In other words, the country is 25 percent more expensive than those countries, based on currencies only.
It was not until the end of 2013 that the exchange rate has brought a greater tendency to depreciate, although it must be considered that it has been a very gradual process in comparison with other countries. Taking into account last year, the devaluation was just over 3 percent, while inflation barely 0.77 percent.
The problem is that direct competitors in Costa Rica, such as Mexico, Colombia, Chile and Peru, have in the last three years boosted their competitiveness by weakening their currencies, making their products, services and tourism cheap in the eyes of investors or tourists.
Only Mexico has had a devaluation in the last three years of 36 percent in its exchange rate and is expected to continue, although not as strong as it has been very abrupt according to several specialists.
Several experts have pointed out that this year we could expect devaluation of up to 5%, with a similar behavior to what was the foreign exchange market last year.