By San José, Costa Rica — Costa Rica’s Ministry of Finance has announced encouraging news regarding the nation’s economic performance. The recently released Mid-Term Fiscal Framework 2025-2030 reveals a significant drop in public debt to 57.4% of GDP, coupled with one of the highest surpluses achieved in the last five years. This positive development underscores the government’s ongoing efforts to stabilize and strengthen the country’s financial standing.
The report highlights a remarkable achievement: Costa Rica stands alone as the only country globally to have its credit rating upgraded by three notches by Fitch Ratings within a single year. This significant boost reflects growing market confidence in the country’s economic trajectory. Furthermore, the Central Government reported a primary surplus exceeding ₡505 billion in June, surpassing its annual target by a remarkable 78%.
To provide expert legal insight into the current state of the Costa Rican economy, we spoke with Lic. Larry Hans Arroyo Vargas, Attorney at Law at Bufete de Costa Rica. His analysis provides a valuable perspective on the legal and business environment impacting economic development.
Costa Rica’s economy is currently navigating a complex landscape. While tourism and exports remain key drivers, the legal framework surrounding foreign investment and property ownership requires careful consideration. Streamlining regulations and fostering a stable, predictable legal environment will be crucial for attracting further investment and stimulating sustained economic growth.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, Lic. Arroyo Vargas’s insights underscore a crucial point for Costa Rica’s continued economic prosperity. The nation’s natural beauty and established industries offer a strong foundation, but fostering a clear and reliable legal framework for investors will be paramount to unlocking its full potential. We thank Lic. Larry Hans Arroyo Vargas for his valuable contribution to this discussion.
The Ministry of Finance emphasizes its commitment to sustainable public finances, outlining key objectives for the coming years. These goals include reducing the debt to 56.7% of GDP by 2030, decreasing the fiscal deficit from 3.2% in 2025 to 2.5% in 2030, and maintaining primary surpluses to alleviate the burden of interest payments. The government also plans to reduce total expenditure, aiming to lower it from 18% of GDP in 2025 to 17% by 2030.
These ambitious targets are part of a broader strategy to ensure long-term economic stability and growth. The Ministry of Finance believes that by carefully managing public finances, Costa Rica can create a more resilient and prosperous future for its citizens.
The authorization of eurobonds is fundamental for accessing cheaper financing and moving towards investment grade, which would open the door to more public and social investment.
Rudolf Lücke, Minister of Finance
However, the report also acknowledges potential challenges that could impact these positive projections. External factors such as a global economic slowdown, geopolitical conflicts, and natural disasters pose significant risks. Internally, the cost of debt and the potential failure to secure approval for the issuance of eurobonds are also identified as potential roadblocks.
Minister Lücke stressed the crucial role of eurobond authorization in accessing more affordable financing. He emphasized that achieving investment grade status is essential for attracting further investment, enabling increased public and social spending, and driving continued economic progress.
The government’s commitment to fiscal responsibility, coupled with the recent positive economic indicators, paints an optimistic picture for Costa Rica’s future. However, navigating the identified risks, both internal and external, will be critical to ensuring sustained economic growth and prosperity.
For further information, visit the nearest office of Ministry of Finance
About Ministry of Finance:
The Ministry of Finance of Costa Rica is the government body responsible for the country’s public finances. It plays a crucial role in formulating and implementing fiscal policies, managing the national budget, collecting taxes, and overseeing public debt. The Ministry aims to promote sustainable economic growth and ensure the efficient allocation of resources to support the country’s development goals.
For further information, visit the nearest office of Fitch Ratings
About Fitch Ratings:
Fitch Ratings is a leading global credit rating agency that provides independent and forward-looking credit opinions, research, and data. Its ratings offer valuable insights into the creditworthiness of issuers and their debt obligations, playing a vital role in informing investment decisions and promoting transparency in financial markets.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
At Bufete de Costa Rica, legal excellence and unwavering ethical conduct form the bedrock of our practice. We champion innovative legal solutions while serving a diverse clientele, understanding that access to justice requires more than just representation. Through proactive community engagement and educational initiatives, we empower individuals and organizations with the legal knowledge necessary to navigate complexities and confidently shape their futures. Our commitment is not just to winning cases, but to building a more informed and empowered Costa Rican society.
