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Friday, January 29th, 2016  |  USD: Buy 531.29 / Sell 543.92
20 years

S&P warns Costa Rica of possible ‘negative’ outlook shift, cites low growth forecasts, high deficits and debt

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September 19th, 2014 (InsideCostaRica.com) The ratings agency Standard & Poor’s is warning Costa Rica that it is considering shifting its outlook for the country to ‘negative,’ citing expanding fiscal deficits and a growing debt-to-GDP ratio, as well as growth forecasts that are below the country’s needs to close the fiscal gap.

 

S&P already rates the country as ‘junk,’ or below investment grade with a rating of ‘BB,’ currently with a ‘stable’ outlook.

 

Joydeep Mukherji, a sovereign ratings analyst for the ratings firm, made the warning during an interview with ADN Radio yesterday afternoon.

 

“We’re all looking at the same facts and figures.  If the fiscal deficit and debt as a percentage of GDP continues to grow, this may have consequences for the future (…) the trend is worrisome,” Mukherji told ADN.

 

Mukherji said that predicted growth is not enough to close the fiscal gap.  The analyst also criticized the country’s inability to reach political agreement on fiscal reform, a criticism also cited by Moody’s when it downgraded Costa Rica’s credit rating to junk status on Tuesday.

 

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  • Scott MacDougall

    Is this really surprising to anyone? Having lived and worked here for over 20 yrs. all the self proclaimed “politicos” and “familias de politicos” are far more interested in their stature, benefits, income from their personal family businesses than actually even remotely pursuing and implementing government policies or passing new laws that move this country and its people in the right direction. Untethered corruption, zero accountability, a complete and flagrant disregard to running a government with in a reasonable budget related to revenues. 40% debt (grossly over budgeted government) of GDP. CR now rated as JUNK investment, who will buy the government bonds required to pay the difference of the cost to operate this government that gets little or nothing done versus what it brings in. 2015 and the ensuing years are going to be rough years for Costa Rica. And what do the Costa Rican people do? How do they react to this obvious and well reported fiscal irresponsibility? Nada, Pura Vida, it is tradition, it is how we do things here in Costa Rica. History has shown that when generation after generation of a self indulgent greedy Oligarchy is at the helm, revolution by the people eventually leads to the change needed. Something has to give and my money is on the young non politico and informed Costa Ricans doing what needs to be done.

    • Karen Mata

      Don’t hold your breath.

    • Karen Mata

      It seems greedy generations of Oligarchy leads to totalitarian rule. At least that’s what we’re getting back home.

    • HONEST MAN

      Thing are going to get tough in Costa Rica expect grocery stores to run out of common goods i am starting store items just incase shit hits the fan. I noticed Automercado prices are getting really expensive in the last 4 days.

  • Michael Clarkson

    The world is finally taking notice of what a corrupt place Costa Rica is, it has become a sewer.

  • HONEST MAN

    As of this morning the Costa Rican goverment had a meeting with senior staff and said expect layoff in 10 day. Also IMF and World Bank said that Costa Rica goverment needs to layoff half of employees in goverment or loans will be called in. Expect big problems soon. Exchange rate should get crazy in the next couple of days. Also banks might see a run on soon expect BCR and BofN and Banco popular to say they are going to layoff staff in days. This morning i closed my account at BCR and the staff at the branch asked why. I told them BCR could run out of money and they admitted to me that i am making a smart move. It took 4 hrs to get my money and moved it to Scotia Bank. The BCR manager told me he opened an account at a private bank last month for his family and moved 70% of his money to that bank.

    • disgusted

      Honest man, I been checking internet about what you reported. IMF and world bank told CR to lay off half it’s employees?? IF indeed October 1st a few thousand are laid off or several hundred this is going to be a real bumpy ride here for many. Do you have any links so we can read whats what?? Retired Ambassador here getting 30K a month. Some Doctors/surgeons at the CAJA getting huge paychecks over a years time half million. I closed all my accounts with the national banks here over year ago. Most inept banking I have had deal with.

    • disgusted

      I have asked around here about your statement of lay offs and all.. No one that I know Tico’s have any info. However, one said Oh the meeting would be for them and how they can keep their jobs, their benefits, their bonus and Christmas bonus. I have searched internet not much on this ….

      • HONEST MAN

        Give it a couple of days the news on layoff in the Goverment is coming also heard from close friend that Pres of Costa Rica is asking for time from IMF and World Bank on intrest payments expect default like Argentina soon. ICE and CAJA are laying off around 170 this week through early pension and just straight up layoffs. My friends father worked for ICE for twenty years and was give 6 months salary to leave ICE. Nobody in media is talking about this at all.

    • TJ

      Still no layoffs after a couple weeks, I suspect they will wait for the World Bank to bail them out. Currency is still holding at 534/$1

  • SDPUS

    Unfethered corruption. You reap what you sow. If you don’t want to lock the government corrupt up, then prepare for all foreign money to depart. No reasonable person is going to invest a penny in Costa Ripp-Off!

  • Likk Mii

    Ticos had the opportunity of the century. Naturally they blew it.They’re destroyers by nature. The only thing they care about is cell fones and the illusion that clean floors makes them appear tidy, hard working and organized when in fact they’re just lazy selfish animals looking for the easy way through their journey to Hades.

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