By Chrissie Long
Tico Times Staff
Costa Rica may be riding above the deep economic flood that’s washed over other developing countries.
Although the World Bank issued a report warning of the lasting effect the crisis will have on poorer countries, Standard & Poor’s has maintained the country’s credit ratings, saying Costa Rica’s financial outlook “remains stable.”
“Recent years of good (gross domestic product) GDP growth and prudent fiscal policy helped reduce the public sector debt burden to less than 40 percent of GDP in 2008, down from more than 50 percent in 2006,” according to the report.
Costa Rica’s Central Bank also is reporting positive signs of an economic rebound, including a moderation in the rate of economic contraction and an increase in retail sales for the first time in three months, according to a recent report by the consulting firm Aldesa. In addition, major foreign investors such as Boston Scientific and Firestone recently have undertaken actions to expand their operations in Costa Rica.
Yet, the picture isn’t as hopeful on the world stage. The World Bank issued a warning on Thursday of the lasting impact the crisis could have on developing countries.
The Washington D.C.-based organization is preparing to dole out a record amount of money in loans this year and also is monitoring the world GDP, which it expects will shrink by 3 percent (a significant increase from the 1.75 percent anticipated earlier).
“Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks,” said World Bank Group President Robert B. Zoellick.
He continued, “Waves of economic pain continue to hurt the developing world’s poor, who have less cushion to protect themselves. There is much more we need to do in the coming months to mobilize resources to ensure that the poor do not pay for a crisis that is not of their making.”