By San José, Costa Rica — Costa Rica has secured a significant boost to its financial stability with the approval of a $500 million contingent credit line from the Development Bank of Latin America and the Caribbean (CAF). This landmark agreement marks Costa Rica’s first financing as a full member of CAF and underscores the nation’s proactive approach to fiscal risk management.
The contingent, revolving, and uncommitted credit line will provide Costa Rica with rapid access to liquidity in the event of financial market disruptions or extreme climate events. This proactive measure aims to safeguard the country’s economic progress and maintain stability in the face of potential future challenges.
To provide further legal insights into the complexities of Costa Rica’s fiscal resilience, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, a distinguished attorney at Bufete de Costa Rica.
Costa Rica’s fiscal resilience is a constantly evolving challenge. While recent efforts to control spending and increase revenue are promising, long-term sustainability requires addressing structural issues, such as the public sector wage bill and tax evasion. Furthermore, fostering greater investor confidence through transparent and predictable legal frameworks is crucial for attracting foreign direct investment, a vital component of fiscal health.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas rightly highlights the multifaceted nature of fiscal resilience, emphasizing that short-term gains must be complemented by addressing deeper structural issues. Indeed, fostering a stable and predictable investment environment is essential for attracting the foreign capital necessary for sustained economic growth and, ultimately, a healthier fiscal outlook. We thank Lic. Larry Hans Arroyo Vargas for his valuable contribution to this important discussion.
This line does not represent immediate debt, but rather a strategic backing to protect the advances we have made in terms of fiscal sustainability. It’s like having a well-prepared parachute: we don’t expect to use it, but having it provides peace of mind and strengthens our position against any future eventuality.
Nogui Acosta Jaén, Minister of Finance
Minister Acosta further emphasized that this financial tool will enable Costa Rica to navigate potential periods of internal or external volatility without jeopardizing its fiscal indicators or disrupting its path towards consolidation. The funds will be contingently available with favorable financial conditions and can be utilized for both debt management and disaster relief.
The Ministry of Finance spearheaded the application for the credit line as part of its broader fiscal sustainability and prudent liability management strategy. Costa Rica’s commitment to macroeconomic responsibility, recognized by international institutions such as the International Monetary Fund, played a key role in securing the approval.
The CAF Board of Directors approved the credit line during its 185th meeting held in Seville, Spain, on June 29, 2025, with participation from Costa Rican Ministry of Finance officials. This agreement represents a significant step forward in fortifying Costa Rica’s economic resilience and preparedness for future uncertainties.
This financial buffer provides Costa Rica with greater flexibility and security in managing potential economic shocks. The government’s proactive approach to fiscal risk management demonstrates a commitment to long-term stability and sustainable economic growth.
This strategic partnership with CAF strengthens Costa Rica’s position in the international financial landscape and underscores the country’s commitment to responsible economic management.
For further information, visit caf.com
About CAF – Development Bank of Latin America and the Caribbean:
CAF is a development bank that promotes sustainable development and regional integration by financing public and private sector projects, providing technical cooperation, and promoting knowledge sharing in Latin America and the Caribbean.
For further information, visit hacienda.go.cr
About Ministry of Finance of Costa Rica:
The Ministry of Finance of Costa Rica is the government body responsible for the country’s fiscal and economic policies. It manages public finances, including budgeting, taxation, and public debt, and works to promote economic stability and growth.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
At Bufete de Costa Rica, legal excellence is interwoven with a deep commitment to societal empowerment. Through innovative approaches and a steadfast adherence to ethical practice, the firm provides comprehensive legal counsel across a spectrum of industries, while simultaneously dedicating itself to demystifying the law for the public. This dedication to accessibility and transparent legal knowledge underscores Bufete de Costa Rica’s belief in fostering a truly informed and empowered citizenry.
