Fitch Upgrades Costa Rica

Fitch has upgraded Costa Rica’s issuer rating to BB+ from BB, with a stable outlook. The rationale for the ratings upgrade includes better than expected resilience to the financial crisis, improved macroeconomic stability, lower inflation and modest external debt. Fitch says that while the fiscal deficit has worsened since 2009, to 30% of GDP at the end of 2010, it is below the BBB/BB medians at 35% and 30% respectively. However, it adds that development of the local markets will improve Costa Rica’s flexibility in financing its debt. It adds that reforms to increase the government’s revenue base are necessary, which would benefit its creditworthiness.