New Warning to Costa Rica

Fitch Ratings reported that the country is under observation and for now maintains the rating at BB, awaiting what happens with the fiscal reform and the payment of government debt at the end of the year.

Friday, November 16, 2018

Fitch Ratings, a U.S. risk rating agency, reported on November 15th that Costa Rica would be close to a sovereign rating downgrade because of the country's public finances situation.

Carlos Morales, director of Fitch's Latin American Sovereigns group, said to that "... The rating remains at BB because we will wait for the outcome of the tax reform and the debt payment at the end of the year. But (the statement) is to indicate that there is a higher probability of degradation."

See "Risk Rating Downgrade Approaching"

Morales added that "... this revision is very short term and has a special emphasis on the debt payment and the loan of almost ¢500.000 million granted by the Central Bank to the Government. We will be checking those events and based on the result we will decide if this can be lowered one (step) or if the deterioration is that way, the possibility of further degradation will be discussed."

Fitch Ratings' review adds to the one announced by Moody's in October, when the rating agency reported that expectations of a continued decline in fiscal indicators and evidence of an increase in financing needs are some of the reasons behind the decision to re-rating the country's debt.

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