Costa Rica Faces Possible Downgrade by Moody's

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    The Costa Rica News (TCRN) – The possible of downgrade by Moody’s for Costa Rica worries the Coalition for Development Initiatives (CINDE) and the Ministry of Foreign Trade (Comex) and the affects of such a downgrade for the country‘s image.

    Since 2010, Costa Rica’s Moody’s rating is Baa3, which implies a positive signal to investors, however, for the second time this year that the level will fall in the absence of fiscal reform.

    “While we worry about a drop in the rating and this implies a warning regarding the macroeconomic environment of the country, it is important to emphasize that FDI is considering (all) the set(s) of variables,” said CINDE director, Gabriela Llobet.

    In essence it would be an increase in country risk of one or two percentage points, meaning that you will pay an interest rate higher.

    Moody’s focuses on sovereign debt risk in equity markets rather than long-term investments that perform multinational companies in the country and stimulation of exports and high-tech services.

    “Costa Rica enjoys a privileged political and economic stability in the region, which (enhances) the possibility of (people and businesses) settling in our country” said Llobet.

    The Minister of Foreign Trade, Anabel Gonzalez, said it is important for the image of the country and the investment community (for us) to keep the (current) rate of Moody’s, as it provides confidence and certainty.

    The administration has indicated that by October a new tax reform bill will be drafted sent although it has yet to materialize. CRHoy

    The Costa Rica News (TCRN)
    San Jose Costa Rica

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