Noting the political system's inability to agree on fiscal issues, Standard & Poor's has downgraded, from BB to BB-, the rating for the country's long-term debt, giving it a negative outlook.
Costa Rica Long-Term Ratings Lowered To 'BB-' On Continued Fiscal Deterioration; Outlook Is Negative
25 Feb 2016
Source: Standardandpoors.com
OVERVIEW
The combination of growing spending pressures and lack of tax reform has weakened Costa Rica's public finances and raised its vulnerability to
The change in methodology implemented by the Central Bank of Costa Rica in the National Accounts System sheds light on problems that cause lack of competitiveness, tax injustice and social inequity.
EDITORIAL
An editorial in Nacion.com draws conclusions on the need to adapt the measurement of GDP in Costa Rica, to the changes taking place in the economy at the end of last century and what has elapsed so far in the present one.
People with kidney failure can now travel normally, covered by a coalition of companies united by the concepts of a sharing economy.
EDITORIAL
The best demonstration of the advantages that exist today because of the unstoppable "sharing economy" is the association of global companies Uber and Airbnb with 0a Uruguayan startup, Connectus Medical, to help solve the problem of the travel needs of people who need regular hemodialysis treatment.
Gaps in GDP per capita between different countries are directly related to the productivity gaps between their respective economies, with education being the main factor in these differences.
The OECD report "Promoting inclusive growth of productivity in Latin America" says that although the region made progress in reducing poverty over the past 20 years, it still stands out at the global level, because of the unequal income its inhabitants.
Fitch notes that the relatively favorable external environment will not be enough for Central American countries to improve their credit ratings, which could remain stable despite fiscal problems.
From the press release by Fitch Ratings:
Fitch Ratings-New York-22 October 2015: External tailwinds are unlikely to lead to a significant uplift in Central America's creditworthiness, says Fitch Ratings in a new special report.
Update on the economy of a region which in its entirety is the seventh largest economy in Latin America and the Caribbean.
From the Executive summary of the Regional Economic Report 2015 published by the Secretariat of Central American Economic Integration (SIECA):
In 2014 the world stage was conditioned by geopolitical tensions which heightened phenomena such as the fall in oil prices and fluctuations in supply and demand in international markets. The world economy grew by 3.4% in 2014, reflecting a rebound in advanced economies and a slowdown in developing economies, but emerging markets still accounted for 3/4 of global growth.
Money laundering has positive economic effect on economies, but also impoverishes the quality of institutions leading to dramatic effects on quality of life in society.
The excellent analysis by Norma Lezcano in his article on Estrategiaynegocios.net, on the US Treasury Department´s inclusion of members of the powerful Rosenthal family in the list of the Office of Foreign Assets Control (OFAC) can be extrapolated to all Central American countries, and is a warning to the governments of the region, where drug trafficking has ingratiated itself and is creeping through state institutions, weakening them by making them serve criminal aims, and preventing them from carrying out their duties properly.
Ineptocracy: A government system where the least capable to govern are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the diminishing number of producers.
EDITORIAL
As the notion of "acquired rights" extends its current deformation which means "even if the world is falling apart the government must pay my salary at the end of each month", the transformation of democracies in ineptocracies is accelerating, especially in reference to democracies in Latin America, and in particularin those like Chile, Costa Rica and Uruguay, where some time ago a combination of enlightened leaders and the majority of industrious citizens created prosperous societies not only in economic terms but also in terms of civility and harmony in coexistence.
The practical sharing economy is keeping pace with digital communications and logistics systems finely tuned to all size markets.
And this realization already extends beyond using Airbnb to rent an apartment for vacation or a using Uber to make a journey. If you need a drill for a couple of hours to hang new curtains, why buy it if it is something which afterwards you will only use occasionally? Rent it.
The President of the IADB has advised Costa Rica to make a tax reform to raise taxes arguing that today the teetotum indicates "everyone gives".
EDITORIAL
The use of the old fashioned game of a faceted spinner by the head of the hemispheric institution as example, deserves to have the whole story told: the person who spun the teetotum was the Costa Rican government, the same participant of the "game" who on their previous turn benefited from the teetotum when it landed showing "TAKE ALL". Luis Alberto Moreno is saying that the serious fiscal crisis which the country now finds itself in means that now everyone must contribute to its solution. That means aproving more taxes.
Very dark is the future of a country where the rulers do not lift their gaze beyond the few years of the mandate conferred on them by citizens.
EDITORIAL
The president of Costa Rica prefers short-term actions to address the fiscal crisis, while leaving open the tap of privileged public wages by which the future of the nation drowns through.
It is clear that immediate measures need to be taken such as reducing tax evasion and smuggling, and cutting abusive pensions. And it is quite possible that in order to maintain the rule of law taxes also need to be raised. But not closing, RIGHT NOW the growing cascade of state payroll costs that is multiplying every year, means mortgaging the future of the Costa Rican economy. However, president Solis postpones dealing with the topic, because its impact would be felt "only after 15 or 18 years."
"The ongoing economic recovery in the United States and persistence of relatively low oil prices will provide favorable tailwinds to the region.Because of supply constraints, the region is expected to maintain a moderate pace of growth in coming years."
From the press release by IMF:
Central bank governors, finance ministers, and banking superintendents of Central America, Panama, and the Dominican Republic, and senior IMF officials met in El Salvador on July 23-24 to review the economic outlook for the region and strategies to strengthen policy frameworks and raise inclusive growth. The regional conference saw the participation of the President of El Salvador, Salvador Sánchez-Cerén; Governor of the Bank of México, Agustín Carstens; Director of the Netherlands Bureau of Economic Policy Analysis, Laura van Geest; and former Finance Minister of Perú, Luis Carranza.
A comparison between the crisis in the United States in 1929 and the one occurring now in Greece clearly shows that the sooner the costs of an exit from the crisis are assumed, the less time will be spent suffering from the measures taken to overcome it.
EDITORIAL
Obviously some aspects of the current economic tragedy of Greece are different from those suffered by the United States during Twenties of the last century.
The twin sister of an old concept of cooperatives which today enemies of capital want to reinvigorate, the ultramodern collaboratively economy creates value by using the internet through more efficient use of available resources.
EDITORIAL
"Sharing Economy", collaborative markets. Descriptions in different languages of a phenomenon that takes on proper names when applied to the efficient utilization of individual means of transport, such as UBER, availability of accommodations to suit every traveler such as Air BnB, and other quick and transparent communication systems between supply and demand which are revolutionizing global trade, especially in services.
An economist is a professional who divides his daily work into two stages: in the morning he explains what went wrong yesterday, and in the afternoon he explains what is happening today.
EDITORIAL
The title of this article with which we are aiming to start the wind down to the weekend (friday 26th), contains words that used to shine in bronze -years ago- on the desk of a then young economist at the central bank of a south american country, a high quality professional who now holds a first class post in that nation.