Costa Rica loses Moody’s investment-grade rating

Costa Rica loses Moody’s investment-grade rating

Costa Rica Corporate & Sovereign Strategy

Moody’s downgraded Costa Rica on Tuesday to Ba1 from Baa3 and changed its outlook to negative, noting the government’s failure to approve a fiscal reform. Costa Rica has struggled to cut its fiscal deficit in recent years. The new government of Luis Guillermo Solis is only targeting gradual fiscal consolidation, rather than comprehensive fiscal reform, Moody’s said as it cut the sovereign to a high-yield rating. The fiscal deficit has averaged 4.5% of GDP since 2009, and is expected to reach 5.8

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