Fitch, S&P Maintain Rating

Fitch as well as Standard & Poor have continued their ratings of Costa Rica unchanged. "The BB+ qualification of Costa Rica," Fitch said in its report, "are supported by its institutional strength and favorable social indicators."

The report went on to mention historic political and macroeconomic stability as well as a qualified workforce that has attracted foreign investment and development of strong exports. But the only cloud on the horizon is the budget deficit.

The economic rating firm mentioned  that the political impass that has foiled efforts to curb budget deficits and the rigidity of its government spending commitments were limiting factors. The prolonged battle over tax reform indicates "political stagnation." the report said.

According to Fitch, the country's fiscal deficit began to deteriorate when the government found itself forced "to use its fiscal space to stimulate the economy" during the global economic recession.

According to Fitch's writer Lucille Broide, the movement to broaden the tax base has gained importance as the country confronts the need to improve its infrastructure and security.

The report emphasized what has already been observed in this blog--much depends on the strength of an economic comeback by the United States, this country's number one trading partner. The report also urged renovation of the tax codes.