Costa Rica will have a speedy recovery

May 19, 2009

Growth in production this year will be 0.5%. Banking system is in a position to withstand a moderate stress. By 2010 Costa Rica is a country that will restore its economic health. For this year, predictions are that production will grow by 0.5% and 2010 growth will be 1.5%.

The forecasts were made by Miguel Savastano, deputy director of the Western Hemisphere Department International Monetary Fund (IMF), and are based on a degree of preparation by adopting appropriate policies and instruments to mitigate the impacts of external shocks.

The analysis allowed the expert to conclude that Costa Rica is among the countries of the region, which could have a more rapid recovery next year.

The reasons are that the country's financial system is sound and that it is implementing a strong fiscal policy, ie, increased public spending for infrastructure and to protect vulnerable populations.

Although direct exposure of banks to the crisis varies depending on the country, the current situation requires that there be in a state of alert before they fully realized the risks of global recession.

In general, financial systems are robust (in both equity and adequacy rates in low-delinquency), the majority of governments have applied cyclical fiscal and monetary policy, for example, by increasing spending on infrastructure.

Moreover, overall performance of the region has been quite good, Savastano said.

However, this year will feel the effects of international financial crisis on a fall in exports and imports, lower domestic demand and a slowdown in credit.

Apart from presenting its report, the representative of the Fund gave support to monetary policy that has followed the central bank and the decision to move towards a system of inflation targets. It also clarified that it is currently not possible to ease monetary policy in the country.


Source: http://www.larepublica.net/app/cms/www/index.php?pk_articulo=24872