Preliminary data on private sector credit in March show a contraction of the balance paid in the first quarter of the year by the national banking system.
During the first three months of the year, the amount paid to this sector of the economy declined by nearly 71,000 million colones. Since last February the Central Bank of Costa Rica, established a cap on the credit of 9% annualized and 12% in colones.
The growth restriction imposed by the Central Bank, is equivalent to 12.2% annualized. However, the growth reported by private banks (16.6%) and even more the System of Savings and Credit Cooperatives (21.57%). Of the 59 institutions included in the estimates, at least 35 companies in 2012 reached a growth of over 12.2%, with 9 of these banks.
The lower demand for credit, which is consistent with an economy growing less, can also seen by observing the rate of growth of credit to the sector. For example, on a preliminary basis to March, the credit would have increased 9.6%, while in March last year the credit is expanding at a rate of 15.4%. Average growth for the first quarter was 10.7%.
According to the Central Bank the previous year showed dynamic foreign currency whose rate at year-end was 17.8%, while the national currency was 11.4%. This situation, it is estimated, due to the differential in interest rates and foreign currency, as well as exchange rate stability observed throughout the year.
Bottom line, the economy is moving forward, albeit very slowly.
The Costa Rica News (TCRN)
San Jose Costa Rica