In addition to increasing the perception of risk in investments in Costa Rica, Bloomberg.com reports that Citi cut its growth forecast for the Costa Rican economy in 2014, from 3.5% to 3.1% and from 4% to 2.2% for 2015.

"The eventual slowdown in growth will further reduce incentives for the government to make the fiscal adjustment needed in the country, which will then affect the prices of the foreign debt, said the report by Citi".

The former finance minister told Bloomberg that "starting from now the incoming government will have to work on discovering the causes behind the exit of Intel and Bank of America in order to take corrective measures."

Source: Bloomberg.com

More on this topic

Costa Rica: Prices Drop for Foreign Debt Bonds

November 2016

The "Trump effect", added to the upward pressure caused by inflation in US interest rates, explains the upward trend in the performance of Costa Rican bonds and the fall in their price.

A resumption of the upward trend seen in debt securities traded on the international market could make it difficult for the government access external financing, in a context in which most bonds from emerging market countries are experiencing the same situation. If the government decides to resort to financing in the international market, the cost of doing so would be higher if bond yields continue to rise.

Central America and the Rise in Dollar Rates

December 2015

For the first time in nine years, the Federal Reserve has raised the benchmark interest rate, by 0.25%, starting off a process of a gradual adjustment which will make credit more expensive.

After seven years of interest rates at historical lows, signs of recovery in the US economy have led the Federal Reserve to announce the first upward adjustment in the federal funds rate, the main reference rate for structuring interest rates in the United States and around the world.

Costa Rican Debt Keeps Falling

June 2013

An increase in the yields of U.S. Treasury bonds has increased the sale of bonds in dollars, impacting on Costa Rican bonds traded internationally and in the domestic market.

From a report on 'Pulso Bursátil', the blog by Aldesa:

Fall in Costa Rican Bond Prices Sharpens

The Price of Costa Rica's Foreign Debt goes Up

August 2009

In the past 7 months, the price of bonds expiring in 2020 went from 105 to 120, while their yield dropped from 9.20% to 6.3%.

Francisco de Paula Gutiérrez, Central Bank President, justified this recovery as a result of economic improvement in the country.

Said recovery is also expressed in the spread, a variable that measures the difference in yield with U.S.