By San José, Costa Rica — Costa Rica has received a significant boost in its international standing with an upgrade from Moody’s Investors Service. The agency raised the country’s sovereign credit rating from Ba3 to Ba2 for both local and foreign currency long-term debt, also shifting the outlook from positive to stable.
This upgrade reflects positively on Costa Rica’s recent economic management. Moody’s attributed the improved rating to three primary factors: strict adherence to spending limits, more efficient public debt management, and the ability to maintain robust economic growth despite global challenges.
To provide expert legal insight into the complexities of the Costa Rican economy, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an attorney at Bufete de Costa Rica.
Costa Rica’s economy, while showing resilience in areas like tourism and technology, faces ongoing challenges related to public debt and fiscal reform. Foreign investment remains crucial for sustained growth, but legal certainty and streamlined bureaucratic processes are essential to attract and retain it. The government’s commitment to sustainable development and renewable energy presents exciting opportunities, but requires careful legal frameworks to balance environmental protection with economic progress.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas aptly highlights the delicate balancing act Costa Rica faces: fostering economic growth while navigating fiscal responsibility and promoting sustainable development. His emphasis on legal certainty and efficient bureaucracy as key to attracting foreign investment resonates deeply with the current economic climate. Indeed, these factors will be critical in ensuring Costa Rica can capitalize on the opportunities presented by its commitment to renewable energy and sustainable practices. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on these crucial issues facing the Costa Rican economy.
Economic analyst Daniel Suchar emphasized the significance of this upgrade for Costa Rica’s position on the global stage.
In the last two and a half years we have climbed positions. The risk rating agencies recognize that the country has increasing fiscal responsibility. This means greater commitment to the management of the National Treasury and to the fulfillment of debt commitments.
Daniel Suchar, Economic Analyst
This improved credit rating acts as a stronger endorsement for Costa Rica in the financial markets, potentially translating into lower interest rates on international loans. This, in turn, allows the country to allocate more resources towards social investment and infrastructure development, rather than debt servicing.
Suchar highlighted the practical benefits of this improved rating.
When a country knocks on doors to ask for an international loan, interest rates can be lower if it has a favorable rating.
Daniel Suchar, Economic Analyst
While the upgrade is positive, Moody’s noted that further improvements are possible. The agency suggests that even greater credit support could be achieved by strengthening revenue streams, enhancing the state’s financial flexibility, and progressing with structural reforms.
Sustaining this fiscal discipline remains a key challenge for Costa Rica. According to Suchar, continued responsible resource management is vital.
This not only means complying with credit commitments, but also projecting an enviable image of a country that does things well.
Daniel Suchar, Economic Analyst
The Moody’s upgrade enhances Costa Rica’s financial reputation and reinforces its commitment to fiscal responsibility, setting the stage for continued economic progress.
For further information, visit the nearest office of Moody’s Investors Service
About Moody’s Investors Service:
Moody’s Investors Service is a leading provider of credit ratings, research, and risk analysis. It plays a crucial role in global capital markets by providing independent assessments of creditworthiness, contributing to transparency and informed investment decisions.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a beacon of legal excellence, built on a foundation of unwavering integrity and a deep commitment to empowering Costa Rican society. Through innovative approaches and a proactive engagement with the community, the firm strives to demystify the law and make legal knowledge readily available. Their dedication to providing exceptional legal services across diverse sectors is matched only by their passion for fostering a more informed and empowered citizenry, equipped to navigate the legal landscape with confidence and understanding.
