©image:
Agustina Cobas
The report "Today in the Market” by Aldesa, states:
"The prestigious credit rating company, Standard & Poor's (S & P), confirmed a "BB" rating for the sovereign debt of Costa Rica, giving it a stable outlook. This level means the ability to pay acquired debt by the country is relatively safe in the short term, but sees long term uncertainty and vulnerability to international conditions.
Costa Rica maintains the rating two notches below investment grade, as issued by Moody's in September 2010.
In its analysis, S & P believes that Costa Rica has several factors which can project economic growth of 5% this year, and between 4% and 5% in the coming years. These factors are political stability, the strength of public institutions and a highly educated workforce, which ensures the attraction of direct foreign investment and tourism.
In all the above areas, Costa Rica shows better than their peers like Guatemala and Turkey, however, there are other threats which prevent progress to the next level, BB +, like Uruguay.
What factors prevent us from improving the grade?
-The inflexible exchange rate
-The dollarization of the economy
On the other hand, the agency believes that the fiscal deterioration observed is due to temporary factors and that the country will be able to raise revenues and to keep similar levels of debt as those countries with the same rating, adding that, if there is deterioration in this regard, the rating could be reduced."
There lies the difference between the investment grade given by Moody's, which is more optimistic about an early tax reform.
More on this topic
February 2012
In the same report Standard & Poor's has unified the risk ratings for both local and foreign currency, at grade BB, due to adjustments in methodology.
Standard & Poor's has rated Costa Rica’s foreign currency as grades BB / B , based on the economic growth and political stability in the country, despite its high fiscal deficit, rising external debt, and a political stalemate that is preventing legislative approval of the tax reform bill under discussion.
March 2010
In the wake of Panama’s upgrade to investment grade, experts are already calling to maintain the efforts that led to such achievement.
Fitch’s recent upgrade of Panama’s debt to BBB- is likely to be mirrored by other big rating companies, confirming Panama’s entrance into the club of investment-grade countries.
May 2010
Standard & Poor’s rated Panama as investment grade; Fitch did the same two months ago.
The risk rating agency raised Panama's long-term foreign- and local-currency sovereign credit ratings to “BBB-” from “BB+”.
"The upgrade reflects our assessment that continued economic growth--combined with moderate fiscal deficits--should reduce the government's debt burden and maintain its financial profile comfortably in line with that of other sovereigns in the 'BBB' rating category," said S&P credit analyst Roberto Sifon-Arevalo. The outlook on Panama is stable.
November 2009
Standard & Poor's (S&P) improved from 'stable' to 'positive' the country's rating outlook.
Long term debt currently stands at 'BB+' whilst short term at 'B'.
"This decision reflects the agency's expectation that 'larger fiscal consolidation and continuous GDP growth could award the country an 'investment-grade' rating", reported Prensa.com.
español
1890
