Policymakers in the Republic of Costa Rica will find it increasingly challenging to finance a projected current account deficit of about 5% of GDP and a public-sector deficit of nearly 4.0% of GDP in 2002, given the relatively adverse external market conditions and the low level of international reserves. Moreover, policymaking could be more difficult in light of the upcoming government elections in February and the likelihood of a more fractious new Congress. The ratings are constrained by: Weak public finances. Costa Rica's central government (including the central bank) deficit is projected at 3.6% of GDP (of which almost one-third derives from losses at the central bank). Costa Rica's expenditure mix is rigid, with central government interest expense to revenue
