The Central Bank restated there are three internal risks threatening Costa Rica’s macro-economic stability. The first one is a high fiscal deficit, which reached 1.3% of the country’s GDP in the first quarter of the year.
The monetary authority showed its concerns about the lack of measures to guarantee public finances sustainability in the mid-term, even though the government has managed to support itself in the last quarters without putting pressure on the interest rates.
The second risk factor for the financial system and the monetary policies’ effectiveness is the dollarization of the loan portfolio, which is largely taken care of with international loans.
Additionally, there is a high liquidity surplus, which could lead to increased inflation. And lastly, although international oil prices haven’t exceeded the level of January’s Macroeconomic Program, there is a risk of repercussions on raw materials’ prices.