The ratings on the Republic of Costa Rica are constrained by: 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. Deteriorating external liquidity. The ratings are supported by: Long-standing political stability, with relatively strong institutions and a general respect for the rule of law than found in peer credits. -A highly diversified economy, with a per capita GDP of US$4,379, which is almost twice that of the 'BB' median. The ratings on Costa Rica reflect persistent and high fiscal deficits because of structural rigidities. Despite the rebound in economic growth that began in 2003, Costa Rica's general government deficit remains high and will
