The recent decision to increase the maximum amount of debt in the USA will not lessen, at least in the short term, the structural problems that the North American country still faces.
Because of this, it is not expected that this measure will immediately impact on the Costa Rican economy, however the cuts made in government spending could lead to lower consumption by North Americans, and therefore reduce Costa Rican exports.
An article in Prensalibre.cr states: "Roxana Morales, an economist at the National University of Costa Rica said that there will not be any short-term effect from U.S. interest rates, but instead it will be in the medium term, since the debt is larger. However, many of these effects depend on whether or not people apply for more loans.
"In June, consumer consumption went down and that affects exports, tourism and to some extent investments, however this year big announcements have been made that have not been reflected in the indicators", she pointed out.
With respect to the exchange rate, she said that there will still be pressure on the influx of dollars, so it could remain at rock bottom as it has been in the recent past.
In the opinion of the INS Valores economist, Carmen Monge, the Federal Reserve will keep its policy rate which will still cause a greater flow of capital to other countries in Latin America, meaning that, at a national level, it is likely that the dollar continues to devalue, having a rate of between 510 and 515 colones. "
Source: prensalibre.co.cr
More on this topic
July 2011
FUNIDES has projected economic growth of 3.5% to 4% for 2011-2013, noting that these are various risks that make the projections err towards the downside.
The executive summary of the second situation report by the Nicaraguan Economic Foundation for Economic and Social Development (FUNIDES) 2011 begins:
August 2009
Growing fiscal deficit could increase the Treasury's participation in the securities market.
Even though economic activity dropped at a lower pace, Costa Rica's economy is still in recession.
Moderation in the contraction rate of the Monthly Economic Activity Index (IMAE) - Economic activity in Costa Rica is still contracting when compared to last year's levels, even though the pace has reduced in the last months. In May, IMAE registered a drop of 3.61% when compared to May 2008, but the largest 12-month drop of this indicator was recorded in February, at 5.5%....
July 2008
Economic growth is slowing down in Central America, but economic activity is still positive in spite of the slowdown in the United States, says the Central American Monetary Board in its June report.
The numbers from the board's Monthly Economic Activity Index for the firs three months of this year show a process of deceleration in both short- and long-term trends and a downturn in the business cycle.
January 2012
Experts agree that 2012 will be a year of slight growth, low inflation and devaluation.
The 30 economists consulted by the weekly publication El Financiero, forecast a GDP growth of around 3.3%, mainly driven by construction and trade sectors through domestic consumption. Interest rates will remain at levels similar to 2011, while the exchange rate could vary between 3 and 6%, reaching between 520 and 540 colones to the dollar at the end of 2012.
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