On June 24, 2004, Standard&Poor's Ratings Services affirmed its 'BB' long-term foreign, 'BB+' long-term local, and 'B' short-term currency sovereign credit ratings on the Republic of Costa Rica. The outlook on the ratings remained negative. The ratings are constrained by Costa Rica's: Weak public finances, characterized by expenditure rigidities and the central bank's large quasi-fiscal deficit; A large, unsupervised offshore banking sector and a high level of dollarization; and Deteriorating external liquidity. The ratings are supported by: Long-standing political stability, with relatively stronger institutions and a general respect for the rule of law than found in peer credits; and A highly diversified economy, with a per capita GDP of US$4,379 almost twice double that of the 'BB' median.
