Current Account Deficit Grows in Costa Rica

The latest results in the Balance of Payments, for the third quarter of 2010 show a significant growth in external imbalance.

Tuesday, January 4, 2011

The current account deficit grew 70% over the second quarter of that year. The main source of the imbalance is the excess of imports over exports. This deficit is partly financed by the surplus in the balance of services and at the level of balance of payments it is usually funded with income from foreign direct investment and other surplus items in the capital and financial accounts.

For the quarter at question, the direct foreign investment inflow was insufficient to pay the excess of imports, so were financed by borrowing abroad.

The imbalance has been aggravated by an appreciated exchange rate, making foreign goods cheaper in relation to national products, encouraging imports. This situation is not a problem in itself, but it makes the country more vulnerable, more dependent on conditions of international funding and investment, considering that current international situation is not reliable. Also, a larger private debt and too much government debt could translate into higher borrowing costs.

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El Salvador: Foreign Trade Figures - I semester 2017

July 2017

The agriculture and manufacturing sectors accounted for the year-on-year growth of 4% in exports registered in the first half of the year.

Five groups of products accounted for 57.3% of exports: Underwear, clothing and other textiles and their manufactures (US $1,167 million), machinery, other electrical apparatus and equipment (US $152.6 million), unrefined sugar (US $134.3 million), plastic manufactures (US $90.3 million) and coffee including roasted or decaffeinated coffee (US $84.3 million).

Fitch Downgrades Costa Rica Due to "Large Fiscal Deficit"

January 2017

The debt rating has been lowered from BB + to BB, due to the high fiscal deficit and the lack of implementation of reforms to start correcting the problem.

From a press release by Fitch:

Fitch Ratings-New York-19 January 2017: Fitch Ratings has downgraded Costa Rica's Long-Term Foreign- and Local-Currency IDRs to 'BB' from 'BB+'.

Foreign investment falls 28% in Costa Rica

July 2008

Foreign direct investment (FDI), which for years has helped finance Costa Rica's current account deficit, fell by 28 percent in the first quarter of this year compared to the same period in 2007.

Central Bank figures show that lst year FDI was equal to 1.2 times the current account deficit in the balance of payments.

Central America: Selected statistics series, graphics and statistical bulletins.

March 2008

Central America: Selected statistics series, graphics and statistical bulletins.

Commerce, National Accounts, Balance of Payments, Public Finance, Inflation, Exchange Rate

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