San José, Costa Rica, since 1956

Costa Rica’s Central Bank predicts growth of 4.8 percent in 2012

Improvement by manufacturing and service companies will help the Costa Rican economy finish the year with 4.8 percent growth, higher than an earlier forecast of 3.8 percent, Central Bank President Rodrigo Bolaños said Tuesday.

However, Bolaños warned that unpredictable global economic events could change growth forecasts by year’s end.

Experts received the news with caution, and many said the local economy could slow down by December.

The Central Bank also set inflation predictions at 5 percent for the end of December.

The new projections come at a time when the government faces a large fiscal deficit, which according to estimates, will finish the year at about 5 percent of gross domestic product, one of the highest in Latin America. In 2011, Costa Rica closed with a 4.4 percent fiscal deficit, lower than 5.2 percent in 2010.

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