Costa Rica: Investment Guide 2009

If we are to maintain growth and profitability in our portfolios, we should be much more aggressive in the types of instruments for investment.

Monday, April 27, 2009

The worst enemy of investment is inflation. In Costa Rica, this variable has increased significantly. According to estimates by the World Bank, it will remain one of the highest in the region.

Furthermore, it is very possible that there will be an increase in the money supply because the government is planning to ask the International Monetary Fund for a $750 million loan to strengthen the economy. Whether it is through the increase in bank credit if these funds are targeted to strengthen it or by other means, there will be more money in the street, which would elevate inflationary pressure.

More on this topic

Central American Banks: Annual Results and Perspectives

April 2009

Fitch Ratings reported that the risks to regional banks during the current crisis are growing and represent a major challenge for 2009.

The combination of reduced credit expansion, fund restrictions and increasing loan provisions have limited the profits of most banks and it is expected for these factors to continue to pressure the results in the coming months.

The destiny of the dollar, the euro, the yuan and the colon

September 2008

In order to reduce the effects of the economic slow down, some politicians are turning to monetary policy or the Central Bank. They believe that by printing more money there will be more wealth, more investment and more employment.

When a Central Bank, such as the US Federal Reserve (FED) or the European Central Bank, increases the amount of money in circulation it is done by reducing interest rates.

Companies and Banks Opposed to Increasing External Debt

April 2009

The Monetary Authority of Guatemala decided, against the vote of banking representatives and private enterprise sectors, to increase debt through issuance by 10.9%.

The main argument by the opposition is that the solution to the problems in the treasury is to reduce state spending, not increase debt.

Costa Rica and the Effects of an International Crisis

September 2011

A report by Aldesa analyzes the effects for Costa Rica of a potential international crisis.

According to Aldesa:

During this week the market has been permeated by an air of positivity due to expectations that European authorities will solve the problem of the debt crisis. However, if more events occur, there would still be risks for the global economy that could trigger a slowdown in the U.S. and Europe.

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