Research Update: Costa Rica Outlook Revised To Stable From Negative On Public Employment Bill, IMF Review; 'B' Ratings Affirmed

Last week Costa Rica's Legislative Assembly passed a public employment bill and the authorities reached a staff-level agreement with the IMF on both the first and second reviews of its Extended Fund Facility, which should unlock official budgetary financing. This follows positive economic and fiscal developments in 2021, such as an increase in real GDP, a decline in the general government deficit, and solid improvement in the primary (noninterest) deficit. We therefore revised our rating outlook on Costa Rica to stable from negative and affirmed our 'B' long- and short-term foreign and local currency sovereign credit ratings. The stable outlook reflects our expectation that no matter who wins the presidential election on April 3, political support for measured progress on

...- Last week Costa Rica's Legislative Assembly passed a public employment bill and the authorities reached a staff-level agreement with the IMF on both the first and second reviews of its Extended Fund Facility, which should unlock official budgetary financing. - This follows positive economic and fiscal developments in 2021, such as an increase in real GDP, a decline in the general government deficit, and solid improvement in the primary (noninterest) deficit. - We therefore revised our rating outlook on Costa Rica to stable from negative and affirmed our 'B' long- and short-term foreign and local currency sovereign credit ratings. - The stable outlook reflects our expectation that no matter who wins the presidential election on April 3, political support for measured progress on fiscal consolidation will continue, which would facilitate access to official external financing....

Research Update