Weaker Growth Outlook Weighs On Costa Rica’s Economic Score
- Costa Rica receives a score of 53.1 out of 100 in Fitch’s Short-Term Economic Risk Index, a moderate downward adjustment from last quarter's score of 56.5.
- Costa Rica's overall score is weighed down by poor marks in the 'growth' and 'fiscal' sub-components of the index, reflecting the country's lackluster growth prospects and persistent fiscal deficits.
- Indeed, Costa Rica has run nominal budget deficits in excess of 4.0% of GDP since 2013, owing to elevated levels of government spending and significant delays in passing fiscal consolidation measures.
- While the Legislative Assembly passed fiscal reform in December 2018, which will combine spending caps with tax adjustments, Fitch is forecasting fiscal shortfalls of 5.8% in 2019 and 5.6% in 2020.
(Source: Fitch)