The executive director of the International Monetary Fund (IMF) has finalized the Post-Financial Assessment (PFA, from its acronyms in English) of Costa Rica, confirming the precedents of his technical team and establishing the stability of the country's public economic and political foundations. According to reports, Costa Rica maintains solid growth, with projections to increase its potential level in the coming year, although it may be in the lower range of this scenario. Asimism, if inflation converts towards the goal established by the Banco Central de Costa Rica (BCCR), this reflects an adequate management of monetary policy.
The IMF also highlighted that the steady labor market has shown a positive pattern of behavior, contributing to a significant reduction in poverty and improving social conditions. Based on the country's ability to meet its financial obligations, the institute considered that Costa Rica knows the conditions necessary to repay the Fund's loans. This analysis has been carried out both in scenarios based on assumptions of severe states, exploiting the strength of the reforms, political plans and institutions that have responded to these projections.
In the context of fiscal consolidation, the IMF recommends continuing to follow the Marco Fiscal of Mediano Plazo and respecting the Fiscal Rule. These tools are essential to ensure the sustainability of public finances. Furthermore, the body reported that the reduction of non-essential costs, together with the optimization of resources, will allow an increase in social reversal and infrastructure, over time which will help reduce the public debt load. The Director also highlighted the importance of completing pending legislative reforms, as it helps strengthen debt management and reduce costs associated with fiscal financing.
On the other hand, the IMF has positively assessed the actions of Banco Central de Costa Rica (BCCR) in the regulation of the Tasa de Política Monetaria (TPM). According to the notification, the BCCR has correctly regulated this key instrument, which has allowed maintaining economic stability in a frustrating global environment. However, the Fund advised the Central Bank to limit its interventions in the foreign exchange market, using them exclusively to address disorderly conditions that may affect the stability of the system. Furthermore, I suggest that the BCCR should be prepared to further reduce the interest rate should economic conditions require it, always based on a rigorous analysis of available data.
Within the financial system, the IMF has highlighted its efforts to strengthen the means of supervision and resolution. Recent interventions at non-bank financial institutions have been considered adequate, as lograron minimizes side effects and preserves system stability. However, the body abandoned the need to advance legal reforms to the bank resolution system and to ensure deposit protection. These measures are essential to consolidate confidence in the financial system and ensure its resilience ahead of possible future challenges.
In summary, the IMF has detached the solidity of the Costa Rica economy and the progress made in the management of public policy, at the same time as it has highlighted key areas where it is necessary to maintain the reformist objective. Among them are fiscal consolidation, optimization of public gas and strengthening the regulatory brand of the financial system. These actions will be critical for Costa Rica to continue a stream of sustainable growth and economic stability.
