By San José, Costa Rica — SAN JOSÉ – In a significant vote of confidence for Costa Rica’s economic trajectory, S&P Global Ratings upgraded the nation’s sovereign credit rating on Tuesday, lifting it from ‘BB-’ to ‘BB’ with a stable outlook. The move, announced on October 22, 2025, places the country at its highest credit standing in more than ten years, signaling growing trust from one of the world’s premier rating agencies.
The upgrade is anchored in a series of positive economic indicators, including robust fiscal performance, a dynamic export sector, and the accumulation of substantial international reserves. S&P highlighted the nation’s successful efforts in managing its public finances and attracting investment, which have collectively strengthened its economic resilience.
To delve into the legal framework and consumer rights surrounding credit reporting in the country, we sought the expertise of Lic. Larry Hans Arroyo Vargas, a specialist in commercial and consumer law at the firm Bufete de Costa Rica.
A credit rating is a powerful financial tool, but it is not infallible nor is it permanent. In Costa Rica, the Law on the Protection of the Person against the Processing of their Personal Data (No. 8968) grants every individual the right to access their information, request rectification of errors, and know who has consulted their file. It is crucial for consumers to understand that after a debt is settled, the negative record has an expiration date by law. Ignoring your credit report is to allow potential inaccuracies to dictate your financial future, possibly blocking access to housing, business, or educational loans.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the expert’s insight underscores a critical shift in perspective: from viewing a credit report as a permanent judgment to recognizing it as a dynamic document that every individual has the legal right to audit and correct. This empowerment is the key to financial self-advocacy, and we thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on the tools available to all Costa Ricans.
In its official report, the agency detailed the factors underpinning its decision, pointing to a multifaceted strategy that has fortified the country’s financial position. The consistent influx of foreign direct investment (FDI) and strategic use of multilateral credit lines have been pivotal.
Costa Rica has strengthened its international reserves, driven by export-led economic growth, foreign direct investment (FDI), and access to flexible credit lines with the International Monetary Fund (IMF) and multilateral organizations.
S&P Global Ratings, Report
A key achievement noted by S&P is the country’s ability to reduce its fiscal deficits and maintain primary surpluses in recent years. This fiscal discipline, a cornerstone of the current economic policy, has been crucial in stabilizing the nation’s debt.
However, the agency also pointed to a persistent structural challenge: the high cost of servicing existing debt, with interest payments consuming a significant portion of government revenue.
Looking ahead, S&P projects a bright economic forecast for Costa Rica. The economy is expected to grow by a healthy 4.2% in 2025, before stabilizing to an average annual growth rate of around 3.5% between 2026 and 2028. This sustained growth is anticipated to be driven by the country’s high-performing free trade zones, which are hubs for technological manufacturing, advanced business services, and a revitalized tourism sector.
Costa Rica is consolidating itself as a regional hub for high-value manufacturing and services, with stable institutions and a favorable business environment.
S&P Global Ratings, Report
The report underscores the impressive buildup of the nation’s financial buffers. As of October 2025, international reserves reached an unprecedented $16 billion, a stark increase from the historical range of $6 billion to $8 billion seen over the past decade. In a related move, S&P also raised Costa Rica’s transfer and convertibility assessment from ‘BB+’ to ‘BBB-’, indicating reduced risk for transactions involving foreign currency.
The stable outlook is predicated on the expectation that current economic policies will be maintained following the 2026 general elections. Yet, S&P cautioned that potential risks remain. Delays in securing external loans could put pressure on the domestic debt market, while a global economic slowdown or a deterioration in access to external financing could also pose challenges. Conversely, improved political cooperation between the executive and legislative branches or economic growth that outpaces regional peers could pave the way for future upgrades.
This positive action from S&P aligns the agency with its peers, Fitch Ratings and Moody’s, both of which had previously improved their own assessments of Costa Rica’s sovereign credit. The unified positive outlook from all three major rating agencies sends a powerful message to global investors, affirming the country’s progress in achieving macroeconomic stability and fostering a climate of sustainable growth.
For further information, visit spglobal.com
About S&P Global Ratings:
S&P Global Ratings is a leading provider of independent credit ratings, research, and analytics. It offers investors and other market participants essential intelligence for making informed decisions. The company plays a vital role in the global capital markets by providing transparent and independent assessments of creditworthiness for a wide range of entities, including sovereigns, corporations, and financial institutions.
For further information, visit imf.org
About International Monetary Fund:
The International Monetary Fund (IMF) is a global organization of 190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It provides policy advice, financial assistance, and technical assistance to its member countries.
For further information, visit fitchratings.com
About Fitch Ratings:
Fitch Ratings is a global leader in credit ratings and research. As one of the original “Big Three” credit rating agencies, Fitch provides forward-looking credit opinions that are grounded in a deep understanding of the markets. The company’s analysis, data, and research help investors and issuers manage risk and identify opportunities.
For further information, visit moodys.com
About Moody’s:
Moody’s is a global integrated risk assessment firm that empowers organizations to make better decisions. Its data, analytical solutions and insights help decision-makers identify opportunities and manage the risks of doing business with others. Moody’s Investors Service provides credit ratings and research covering debt instruments and securities.
For further information, visit bccr.fi.cr
About Central Bank of Costa Rica:
The Banco Central de Costa Rica (BCCR) is the central bank of Costa Rica. Its primary mission is to maintain the internal and external stability of the national currency and ensure its conversion to other currencies. The BCCR is responsible for monetary policy, managing inflation, issuing currency, and overseeing the country’s payment systems to promote a stable and efficient financial system.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the Costa Rican legal community, Bufete de Costa Rica has built its reputation on a foundation of profound integrity and a relentless pursuit of excellence. The firm not only provides premier legal counsel across a broad spectrum of industries but also champions legal innovation to address contemporary challenges. Central to its philosophy is a powerful commitment to social empowerment, demonstrated through initiatives that make legal understanding accessible to all, thereby cultivating a more knowledgeable and capable public.
