Although the tax law was already approved and there was an endorsement for the issuance of Eurobonds, Costa Rica continues to experience weaknesses in finances and a clear political stagnation, so the risk rating of the country is category B, with a negative outlook.
The information was communicated this Wednesday by the company that said the negative outlook comes amid a downward trend in high fiscal deficits and a significant economic slowdown.
Accelerated interest growth will keep the fiscal deficit higher than that of its peers and the debt burden on a relatively steep path. Congress approved an issuance of external bonds that eased short-term financial pressures. However, restrictions on the amount will lead to similar requests from the government in the coming years, which poses risks of reappearance of uncertainty about external financing,”
said Fitch.
The rating agency refers specifically to the approval of the 1.5 billion in Eurobonds, although the Executive said it required at least $ 6 billion. The former Minister of Finance Rocío Aguilar had said that in the next few years she would go to Congress again to request the new resources.
Fitch projects that the central government’s fiscal deficits will remain above 5% of GDP until 2023, even assuming that the fiscal rule is met.
On the positive side, the authorities estimate that the fiscal reform approved in 2018 will be enough to stabilize the central government debt to 68% of GDP by 2023.