The Costa Rica News (TCRN) – The rating agency Moody ‘s Investors Service has downgraded the bond rating of the Costa Rica government from Ba1 to Baa3, as published in Bloomberg , which says that “the credit rating of Costa Rica was reduced to junk” due to a weak institution and growth in both the fiscal deficit and public debt.

The projection of the fiscal deficit has averaged 4.5% of Gross Domestic Product (GDP) since 2009, largely driven by growth in spending and is expected to reach 5.8% of GDP by the end of 2014 and 6% next year, which was regarded by the company as a lack of action.

Before, the outlook on the Ba1 rating of government bonds to Costa Rica indicated stable rating changes are unlikely in the next 12-18 months.

Melvin Garita, an economist, said, “The implication that this has on the economy is that the issue of Eurobonds that the government should place the next year will cost even more in 2015 and that puts pressure on the medium-term interest rates.”

The Costa Rica News (TCRN)

San Jose, Costa Rica