LatinNews Daily - 25 September 2025

*International credit ratings agency Moody’s has upgraded the Costa Rican government’s long-term local and foreign currency issuer and foreign currency senior unsecured debt ratings to Ba2 from Ba3, and has changed its outlook to stable from positive. According to a Moody’s statement, the upgrade reflects its view that “prospects for the sovereign’s fiscal and debt metrics have improved meaningfully, underpinned by continued progress on establishing a track record of fiscal discipline alongside robust economic growth.” It notes that the country’s GDP grew 4.3% in 2024, driven by exports, inward foreign direct investment (FDI), and strong private consumption although it forecasts that real GDP growth will slow to 3.5% in 2025 and remain around that level in 2026-27 due to the impact of the 15% tariff imposed by the US and “softer global demand”. As regards the rationale for the stable rating, Moody’s states that while “robust, albeit slower, economic growth will continue to support the decline in the government debt burden”, Costa Rica's “still-low tax base has seen limited benefits from the economy’s robust growth, and as external growth drivers subside due to the impact of global tariffs on external demand, economic activity in Costa Rica will be subject to downside risks”. The statement highlights Costa Rica’s fiscal consolidation, through the “government's adherence to expenditure ceilings and proactive policy management”, noting that public debt has dropped from “its 67.6% of GDP peak in 2021 to 59.8% in 2024”. Moody’s forecasts that the general government primary surplus will widen to 2.6% of GDP in 2025 from 2.3% in 2024, implying a lower overall fiscal deficit of 2.2% of GDP in 2025 from 2.8% in 2024.

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