Amid the struggles of economic crisis, the International Monetary Fund (IMF) delivered positive news Monday, announcing that Costa Rica has weathered the brunt of the downturn and that the country is expected to see positive economic gains in 2010.
An IMF team visited Costa Rica from Aug. 10-21 to assess the state of the financial and economic status of the country. The IMF representatives met with Finance Minister Jenny Phillips, President of the Central Bank of Costa Rica (BCCR) Francisco de Paula Gutiérrez, as well as other government officials and members of the private and academic sector. At the completion of the discussions, Andreas Bauer, the IMF mission chief for Costa Rica, assured the country that economic recovery is expected.
“The Costa Rican economy has withstood the impact of the global economic and financial crisis relatively well,” Bauer said. “The strategy to shield the economy from external shocks through fiscal stimulus and the mobilization of contingent external financing has helped preserve confidence and financial stability, and mitigated the decline of the economy.”
Bauer added that, though gross domestic product (GDP) is expected to see a 1.5 percent decline in 2009, the recent resurgence in economic activity should lead to 2.3 percent growth in GDP in 2010.
A theme throughout Bauer´s presentation was the sound financial and social responsibility by firms and businesses, praised for their timeliness in the repayment of credit lines and commitment to investing in human and physical capital.
In April, the IMF approved a stand-by arrangement, which was a 15-month agreement that offered Costa Rica access to an as-needed fund of over $730 million. The precautionary fund was offered as support in case of continued economic and financial weakness. Costa Rica has yet to dip into the fund and has met the “ quantitative performance criteria and structural benchmarks” of the agreement, according to the IMF.