Moody’s reduced Costa Rica’s risk rating from negative B1 to stable B2 this February 10th, according to the chief to the Legislative Assembly, Rodrigo Chaves. The official announcement happened this afternoon, in New York.
This information was presented before the plenary of the Legislative Assembly, as was an explanation regarding the increase registered in the fiscal deficit in 2019 and a series of extraordinary measures to face it. The weighted average cost of the debt is 7.9%.
The change in the country’s risk rating will cost the State about $250 million a year, unfortunately. The US agency uses a method to create risk ratings. In this case, it classified Costa Rica’s emissions as speculative and the country as being of high credit risk.
Based on current trends, the debt projected will increase to about 70% of the GDP by 2022. The group of investors that can buy debt bonds from the country is shrinking. The last time the risk rating was reduced was in December 2018.